Equipment, lab space, etc. - are all owned by the university or funding agencies. Most research institute/universities will give tenure track faculty a 'startup

Equipment, lab space, etc. - are all owned by the university or funding agencies. Most research institute/universities will give tenure track faculty a 'startup package' which includes space and $. So no, they can't just start doing private work with their equipment/staff. Especially when you consider the low salaries paid to their staff (graduate students) who will regularly work for 60+hr/weeks for $40-$60k/yr depending on university. And those students are there for their education and the name of the university, not for the PI. So they will need to start from scratch, with no money, equipment, etc.