A bit of both, I expect. However, you do neglect the legacy code effect; two great coders writing a new system that basically works can happen amazingly fast, while a larger team doing maintenance and enhancements on an existing code base takes a lot longer.

And yes, they probably make them grow too fast. The anecdotes I've read about life inside a startup suggest that most VCs are actively harmful to companies at every point except while signing checks. However, it may very well be a rational strategy for the VCs, because a lot of dead startups and one huge success makes them more money than a handful of moderately successful companies and no smash-hits.