The answer is probably the same but more abstract. Something about liquidity, secondary markets, counter positions, blah blah. I'd love to hear a professional in the industry explain it in more fundamental terms as I bet it would also serve to explicate the underlying mechanics of all markets of that sort.
Shorting a startup is super-dangerous. If the company fails, you effectively win the original value of the shares you shorted (since you sold them initially, and can now buy them to return to the lender for $0). If the company succeeds you can be out 10, 100, 1000x the original value. You'd need very deep pockets to get into the startup shorting business, and even you're right 100% of the time, the returns are modest (100% minus interest and fees over however many years until the company dies, which could easily mean less than 20% ARR). If you can be right 100% of the time about something, you can make a much higher ARR.
To be clear, I'm not bundling early startups in angel, series A, B or C. I'm talking about late stage companies that should be going public but aren't. Instead they are being propped up by private equity or foreign investment, with no market. Some of these companies are absolute dog shit, yet they continue to receive funding and insane valuations in a vacuum.