Some of those sophisticated investors are also engaged in shameless capital extraction. Their investment thesis is based on the "Greater Fool Theory": they're gambling that they can dump the inflated assets on another bag holder before it blows up.
Yes! The only metric that matters is assets under management, since that’s where funds take their cut. Nothing else matters.
A16Z used to be a respected investor, then they went crazy deep into crypto scams and their AUM exploded, so they made more money than ever before.