The valuations at which VCs invest are not unconstrained though. The valuations at which they invest have to be on average a lower bound on eventual exit valua

The valuations at which VCs invest are not unconstrained though. The valuations at which they invest have to be on average a lower bound on eventual exit valuations, or they'll at best break even, and a VC firm that does no better than break even in one fund will have a hard time raising its next one. E.g. if a VC fund invested in 10 companies at a valuation of a billion each, and 9 tanked while one ended up being worth 20 billion, they'd fairly happy. But all 10 can't tank. It has to work out on average.