This is not hard to believe even without any malicious intention. Each round might have several investors (hopefully some repeats from earlier rounds, but there

This is not hard to believe even without any malicious intention. Each round might have several investors (hopefully some repeats from earlier rounds, but there are usually some new investors each time), and startups with significant spend will have had a few rounds. If you and a customer have a dozen investors each, it's pretty likely you have an investor in common. However, even if you have no investors in common, this effect still happens. Everyone was growing and charging each other increasing amounts of money, which lets you raise on the assumption of continued growth. Once everyone stops spending more, freezes hiring, cuts costs, lays off, and sees all their customers do the same, all the metrics plateau or dip and you suddenly can't leverage the assumption of continued growth.