Then they realized

Then they realized: Wait a second, the guys who are investing in the second-to-last private round are getting marked up by us, so there's an ar-bitrage there too. They started using that logic, and they worked all the way down the stack, without necessarily having the expertise to evalu-ate early stage startups. You can imagine the result of this. Money flooded into startups, and it drove valuations sky high. But as interest rates have gone up, liquidity has gone down, and there's been a popping of that bubble. So, the industry is going through a big reset right now.

— from Takeoff Into Chaos · Holy Grail of Investing: The World's Greatest Investors Reveal Their Ultimate Strategies f

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