1) Startup founder gets an idea and develops a legitimate product.
2) The company gains some customers, but the growth is tough, since competing products often sell below cost.
3) The founder gives up and goes to VCs.
4) VCs take away the controlling stake in exchange for an endless stream of cheap money, so the company can start selling dollars for 90 cents just like the competition.
5) The founder's vision is no longer a critical asset, the cheap VC capital is. The founder gets pushed out and replaced by the VCs' protégé.
6) If the stars align, the (still unprofitable) company exits. Numerous retail investors buy shares in something they've heard about but don't fully understand. VCs get 100x returns. The founder gets a letter of appreciation.
The whole cycle is all about getting a bigger share of the endless stream of cheap money from the fed. VCs throw in a lump sum to buy visibility. Enough visibility guarantees that more people with extra freshly minted cash on hand will choose your shares over other speculative investment.
Except all that recently printed cash is now competing for wheat and baby formula (hence inflation), so the fed has no choice but to backtrack and raise interest rates. And if this holds for sufficient time, the whole VC game may suddenly stop paying off.