Let's say I'm an investor and a founder of a company in my portfolio does this. What would be an appropriate response? This seems like a cartoonishly gratuitous waste of capital.
You'd either fire them on the spot. Or, if that's not an option [1], quietly figure out a longer-term strategy for eventually firing them.
Or, if you're a Nice Guy, you'd offer to let them stay on if they return the gratuitous waste of capital and/or pay the company back.
I'll never quite understand why founders are treated as an exceptional case by capital. Especially in hard tech fields like self-driving where the idea is literally obvious to a five-year-old but the execution requires courting `the best humans available.
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[1] e.g., an engineer with mostly undocumented knowledge of key parts of your software or sales rep with close relationships to a client during a critical time period.
I have seen termsheets where the founders need board/investor approval for spend over $XXXK, so that it stops/limits misuse of capital.
This could have been board approved, if it needed to be or else investors/boards can always ask for it to be returned and mandate approval for future spends above $X in categories outside of regular business spending.