Im not on the side of VCs, but many are victims, not guilty, of this.

Usually, institutional investors(e.g. Fidelity) give money to VC funds that spend most of their time finding good and reasonable investments.

However, Fidelity and other institutional investors have been investing in late-stage deals, "cutting off" many VC funds and increasing valuation of companies.

http://www.bain.com/publications/articles/shadow-capital-ste...