Very simplistic view. When VCs put in that much cash, they also pressure management to spend it as fast as they can and expand and conquer new markets. That's the bet. That's the game.
Fab did that and it turned out the market was not there to float the investment. It happens, sometimes the firm beats the odds and people celebrate the management and their free spending ways as the reason for impressive growth. The ignore all the mistakes because the end result is all that matters.
Sometimes the bet doesn't pay off and here we are. Blaming the management and all the mistakes they made as the reason they ended up in this situation. The reality is the VCs, the management, and the employees know the truth. It is a game, it is a bet. If it folds, they move on.
Not sure why people get so worked up, lash out against management and go on and on about calling them "evil". It is a cop out. A lot of those same people were calling that same management "geniuses" for the rapid growth a couple of years ago.
Just a reminder: the employees know it is a startup and they know the risk. That is why they picked Fab because of the potential upside vs. working at a place like IBM.
Of course, and it was the execution choices by management that allocated that $300 million in such a way that they didn't arrive at a sustainable business. As such the business goes down the drain and the employees with it.
If most of the employees are technical, and the company is run like a typical tech company (ie, with too much middle management, but not headcount literally dominated by them), then line employee headcount costs likely dwarf those of management.
That is one reason why executive compensation can get so outrageous; if you have a lot of employees, most singular expenses become rounding errors.
