If I had to summarize the problem it would be that there is too much financial capital and no market signal to tell people to stop producing more financial capital.

You have this huge amount of money that you must dispose of for which you demand x% of return. All those startups can deliver x% returns but they can't use all of your money. So you stop giving them money and instead give it to those that are promising x% and taking as much funding as they can get their hands on, fully aware that they could run their business with much less funding and then you end up with all these absolutely gigantic money losing unicorns with the hope that you can sell them to other investors and let them be stuck with the loss by telling them that some sort of monopoly forms which will make it worth it.