Here's my ignorant perspective as an outsider to SV:

Starting with the late 90s, techies (good people, smart people, people who built things) got rich in a new, very fast way. Whether they were early investors in Netscape, employees of Microsoft, or one of the many who started companies which were then bought by giants, the result is that they came into money so big that they literally had it to burn.

After the "how many Ferraris can I own" phase wore off, they continued doing what they loved - building and being involved in tech projects. This resulted in more financial successes, and more money.

Early windfalls put them into new positions as investors. And frankly, by investing in a selection of start-ups, the outcome was almost certainly that at least one investment would pay off 1000x or more. This created more money.

However, in many cases, these gains were artificial. The stock market creates play money which big companies can use to buy smaller companies, thereby "increasing" their perceived value - and thus their stock price, and thus their ability to go buy more. This is not sustainable, because eventually there isn't something big enough to buy to keep up the appearance of growth and increased value.

My favorite example of this was WorldCom https://en.wikipedia.org/wiki/MCI_Inc. MCI, for those old enough, was once a booming telco with the strongest internet backbone in the US. The got bought by a little Southern US company run by an aggressive CEO - Bernie Ebbers, who learned that acquisitions paid for with stock would increase the "value" of the company, which would increase the future buying power of the stock. I enjoyed a brief and completely ineffectual period of employment with MCI-Worldcom and got to see the dysfunction of the collection of gathered companies. Unfortunately for Ebbers, it was getting difficult to find companies big enough to buy that would make a measurable increase in perceived value. Sprint was the last big target, but that sale was blocked by the US because it would have created an internet monopoly. MCI-WC happily offered to buy Sprint without their internet component, but Sprint rejected that. Once the deal was off, the drag of poorly integrated companies all under one umbrella slowed the MCI-WC train to a stop. Then the investigations began, and we know how that turned out.

I see this repeating, but starting with the early tech-millionaires. They have so much money, and they seek similar % returns, so they're willing to dump more money into more ambitious (or asinine) projects. But as those of us outside the madness can see clearly, it won't work.

That's not to say that new ideas should get investment, and that's not to say that 1/10 success rate is bad. But keeping some sense is important, and it really appears that the "successful SV investors" have totally lost their sense. In the end, they won't be hurt; the foolish stock market investors will, as usual. They follow trends, they buy into unicorns when they're allowed to, and they usually come out losers.

I would like to see a real shift in behavior from the current tech investment system. First, the supposed race to returns which causes some companies with a good idea to make terrible short term decisions (under pressure from VC partners) needs to stop. That is just a screwing and fleecing of other people which only serves the VCs. Second, if a company cannot become profitable in a few years (depending on the type of product/service), then the investment should stop or the company should make a huge pivot. Third, that VC money should be distributed more widely across education. There are a lot of very talented, motivated young people who could do great things if given some opportunities.