After seeing it burn two different startups I was at, I am baffled why they burn money to have offices in a big city when money is tight (or they should be acting like it, rather than assuming they will always get another round at favorable terms)
When you are stable and profitable, having an office isn't that big of a deal. When you are burning money and looking down a cliff, maybe a $25k+ / mo expense is better spent hiring someone. Plus you can ethically pay people under market and both sides are happy (employee cuts their expenses by 50%+, you cut your payroll by 25%). Your employees will be happier, you get to pay them less, no need to buy desks, you can scale your business infinitely and you get rid of likely your biggest expense.
Startups could even spend a tiny fraction on improving their employee's offices. $1k yearly home office stipend would be huge for an employee, but a drop in the bucket compared to $1k / employee / month office expense.
VC funding causes people to make dumb decisions.