It isn't long-term sustainable and it will result in a major correction one day, but that's the game currently.
That is also why quite often they bring in (and sometimes replace founders with) "professional" executives before the IPO. Some of these people are not usually the best people to maximize the long term trajectory of the company but they bring more confidence to IPO investors.
If you want to have a successful relationship with them, you had better know their motives and timelines and make sure your company is one in the fund that looks is going to return enough for their game.
The societal accomplishments of capitalism are effectively distraction and insulation from the side effects of complexity.
Fun anecdote I heard from a very seasoned VC. He mentioned a trick VC funds use is to raise capital, then spend that fund before any of the companies can make a return (this varies from fund to fund, but imagine anywhere from 2-10 years, usually centering around 5-7). They then go back to their LPs saying "look how good our portfolio is doing, we just need more money to help them out!" without any truly meaningful metrics such as profitability, and essentially keep the house of cards afloat like this by cyclically raising capital before funds can show an ROI.
Also most VCs lose money, but nobody (by which I mean LPs) ever seem to care about that because they're excited about the potential without understanding the risk of the market.