Who are the people winning and losing in the Silicon Valley Ponzi scheme?
The steeper the growth rate of a company, the more appealing is is as an investment, so as long as the company can keep raising money, early investors are made to look like the geniuses.
This dynamic encourages investors to push the company to raise more and more money, and soon enough, the CEO has no choice but to raise more. No money and the companies goes out of business.
The cycle continues, as the company bleeds cash and gets further and further diluted. Startup employees get screwed holding bags of worthless diluted equity, while the VCs are getting rich off the funds fees.