Not just Cuban:
https://www.enterpriseirregulars.com/99491/dry-bubble-may-means/
Check out the charts.
All this means is that someone is willing to series 'B' a company for some absurd amount, which pumps up the TVPI, but since the companies feel no need to exit from their privately held status via IPO or allowing themselves to be acquired, the VCs are unable to cash out.
Typically this is true ... but it's also an excuse the GPs (general partners, the people who control the financial decisions for the VC fund that did the backing) give to the LPs (limited partners, the people who fronted the money into the fund in the first place).
In general, this ignores two things:
(1) Private placement of the equity held by the fund.
Because the VCs are either seed round (typically, VCs are not seed round; they leave seed rounds to angel investors, unless they really believe in the team, have worked for them before, and think they can leverage the product they're working on to -- god, you made me say it! -- build synergy) or series A.
If they are series A, a private placement will net them a large profit. On the other hand, they have preferred shares, and if they can structure an acquisition or IPO exit, they can expect a 5-50X return compared to a private placement of the equity, because they get paid at whatever higher rate that can structure for their stock class.
So VC fund GPs are really reluctant to exit via private placement when they believe they have a huge payday on the horizon.
(2) Private fund equity exchange by one or more LPs.
In general, an LP is permitted to find someone to buy out their equity in the fund. This lets them realize a smaller return earlier, while allowing the GPs to keep the equity in their pocket until an IPO/acquisition exit. I am not aware of a fund LP agreement that doesn't permit this, but practically speaking, I'm sure there's some first time investors who have been snookered into this without having consulted a lawyer or an accountant. In practice, however, the LPs can get out, and realize some of the equity from the so-called "dry bubble gap", as a replacement LP comes in to assume the latency of the GPs waiting around. The catch on this is that most fund LPs are all-or-nothing, meaning you can only exit the fund, you can't exit only the unicorn part of the fund, and the GPs may not like you doing this enough that you are not asked to participated in the next fund.
So practically speaking, there's really no such thing as a "dry bubble gap"; the only reason they exist (and are called "dry") is that the funds are illiquid until such time as the GPs agree to exit, by whatever method. This prevents them from investing in new things, so a unicorn can soak up all of the theoretical equity value (as opposed to the initial fund value), preventing them from releasing DPI, and taking their LPs into the next fund so they can do new investments.
This is not a bubble. It's no fun for the VCs because they can't go out hunting new things to invest in because all of the LP capital they could theoretically spend is tied up ... because of the decision by the VCs (fund GPs).
How exactly does the revenue destruction leverage calculation work as a business model? Blackmail?
How about "We'd like to get more customers out of India; we're willing to partner with you to deliver limited Internet service to a lot more people, which you can then use the fact that they now have mobile devices to upsell them on full Internet service, and to upsell them on SMS/MMS services. Alternately, our other option for increasing our customer base is to decrease the cost of WhatsApp in order to attract more customers. This would have the unfortunate side effect of you losing even more SMS/MMS revenue than you've already lost".
So ... "That's not blackmail; that's such a dirty word; that's just smart business! Plus, you know, they have a choice, and we offered to partner with them!".
The fact that it's pretty obvious that they control something that's cost the companies (not Reliance specifically, and not just in India) a collective $9B in revenue last year (in the same way that RIAA/MPAA "lose" money for everyone who fails to buy the new Britney Spears album/watch the latest Pauly Shore movie because they suck) is what gets them in the door to make the partnership offer in the first place, rather than being told "go pound sand".
Before Facebook bought WhatsApp, they would not give Zuckerberg a meeting.
WhatsApp is, of course, destructive of SMS/MMS revenue, given they way they've structured their profit centers around SMS/MMS and not Internet service, so it basically commoditizes their services as very close to "dumb pipes". This is the same thing that anyone who has put a bandwidth cap on someone in the U.S. is familiar with (and which the cap is designed to combat). But the writing is on the wall with things like Google fiber, and the direct satellite Internet projects that several companies are now pursuing: connectivity will be commoditized, and if it has to be over their dead bodies, then it'll be over their dead bodies.
And yeah, I've analyzed some of the other "monster/unicorn valuations", and there is similar reasoning behind their value as acquisitions, as well, or just their value sitting out there with the VCs GPs unwilling to part with their "as yet unrealized dry bubble" profits. You just have to look sideways at these things. :)