They don't make money from the VC fund.

My guess is that the go down this route because of ego. After it bimbos they use the fact they were a GP in a VC fund to accelerate their career.

After all being a GP in a VC fund you must be good at raising money? Most leaders in business aren't exposed to scammers like this. They would most likely consider the fraudster for a more senior role.

I am guessing it is at the other end of the sausage factory. Institutional investors, banks etc. will drop money into their bank account in order for them to 'invest' it wisely with startups they find. Fraudster simply withdraws the cash and disappears with it.