"while a VC can remove a founder who misbehaves, there is no corresponding recourse when a VC is the source of the problem." Yes, there is. A board is decided

"while a VC can remove a founder who misbehaves, there is no corresponding recourse when a VC is the source of the problem." Yes, there is. A board is decided upon by shareholders. There may be shareholder agreements (linked to term sheets etc) that grant Board membership or nomination powers to a minor shareholder, like a VC, but the power is retained at the Shareholder level. The Shareholders nominate the Board. The Board instructs the CEO. If the CEO is strong and/or a Shareholder, this often makes alignment between those three roles easier, but of course it doesn't prevent the possibility of a situation like the OP describes. Still, claiming there's no recourse for a bad board member or VC is not accurate. And founders don't forget - funding is always an option, with risks and rewards.