Yes, all those funds will finally end up in VC coffers, and exactly this I find worrying, when looking at it from the startup's side. Let me make an example with numbers: In a normal world, during a funding round a startup receives for example $10MM for 20% of their stock. They typically calculate with 2 years to spend the funds plus 18 months runway. Not calculating the extra money the startup must raise to be on the safe side, if the $10MM is worth a lot less at the end of a cycle because of inflation, part of the stock they sold went into "funding inflation". As the startup can only do so many rounds until founders are fully diluted, at some point, inflation will dilute founders so much that they may walk away, for the bad of both sides. IMHO, like so many things, the current investment model only works well when inflation is low.