Totally agree. I came across a few of these over the years. Entrepreneurs that have done 5-10 companies in the past and none succeeded. They always raise money and fill their coffers and their friends' too. They stiff good vendors. Because if you can get real work done for free, it gives them the optics of having created something but they still have more money to squander before it goes belly up. And when the company closes down, unless you can prove fraud there's no recourse.
In the movie Goodfellas they articulate it well - obtain the goods on credit, move it in front door and sell it at a discount out the back. It doesn't matter. It's all profit! Then they even light it on fire and collect insurance money.
Here in Norway they have a name (to the Goodfellas ref.), in the lines of "bankruptcy jockeys/riders", meaning that they ride companies into bankruptcy.
They are especially rampant in construction, where it's easy to get bank loans, by showing contracts and won bids (which are won by aggressively undercutting competition), and inventories can be flipped with ease.
We do have laws that essentially gets them banned from owning companies, if they pull that off too many times - but they easily circumvent that by just persuading friends and family to start companies on their behalf. It's a scummy business.
In the movie Goodfellas they articulate it well - obtain the goods on credit, move it in front door and sell it at a discount out the back. It doesn't matter. It's all profit! Then they even light it on fire and collect insurance money.