[zefalt]

I understand most of your questions may be rhetorical, but I'll try to clarify some aspects.

The FDIC insurance coverage limit is an arbitrary number. It was enacted during the era of the Great Depression to protect the common people's money from bank failures. The limit was raised from $100k to $250k during the GFC. It was always meant as a deposit insurance to protect the common person...not the wealthy. To offer full insurance to all bank deposits would cost $18-20 trillion. This has never been the normal and is just not feasible.

You always have counterparty risk when you have someone else hold your money. Even if the fed starts CBDCs (central bank digital currencies) and gives everyone a fully 'insured' bank account, the fed is still your counterparty. These risks should always be managed.

You can avoid counterparty risk by holding your own money. You can transact in cash if you want to avoid banks. You would have to take care of your own security and safekeeping which makes it unfeasible in large amounts.

To think that companies or VCs would not be advised of standard corporate finance practices seem like a huge failure.

One of the axioms in finance I've run across is that you can never eliminate risk. You can only move it around.