Sorry for the late reply. I think you're probably right about it being in a bubble, but I'm not sure we'll see it having a large crash that we typically associate with bubbles (some people would even say there is no bubble, if it does not pop).
VCs are backed by large amounts of capital because most government policy has been to stimulate growth and the only way they know how is by giving away large loans at insanely cheap (in many cases even negative in real terms) interest. This means that VCs can actually lose out on money by not taking those loans and investing it, and that in turn drives a lot of speculatory investment, as well as inflates asset and stock prices which the government then uses to show how good it is.
This is why you correctly spotted that step 4 is not a requirement for start ups anymore, because so long as you are big enough to be speculated on, you're good for funding. Whether that means it's broken really depends upon your definition of working, as a lot of people believe it's fine because all seems to be going great. This is the gambler's fallacy. It's all fine, until it isn't.
VCs are backed by large amounts of capital because most government policy has been to stimulate growth and the only way they know how is by giving away large loans at insanely cheap (in many cases even negative in real terms) interest. This means that VCs can actually lose out on money by not taking those loans and investing it, and that in turn drives a lot of speculatory investment, as well as inflates asset and stock prices which the government then uses to show how good it is.
This is why you correctly spotted that step 4 is not a requirement for start ups anymore, because so long as you are big enough to be speculated on, you're good for funding. Whether that means it's broken really depends upon your definition of working, as a lot of people believe it's fine because all seems to be going great. This is the gambler's fallacy. It's all fine, until it isn't.