Sounds like the venture funds are actually doing their jobs then, namely trying to get the best possible return and not just blindly throwing money at everyone

Sounds like the venture funds are actually doing their jobs then, namely trying to get the best possible return and not just blindly throwing money at everyone who walks through the door. As an industry matures, returns to capital should naturally fall. This is a normal process, as the 'obvious' opportunities are systematically exploited, and the industry itself creates large incumbents that compete with startups. The fact that venture funds are smoothly pivoting is a good thing, regardless of whether that's what LPs thought they were signing up for. If LPs are really upset at cash sitting around, they can (eventually) ask for their money back and find a different fund; that can't happen if the fund makes bad investments and loses the principal. The worst possible outcome would be if funds forced themselves to keep doing business as usual until everything blew up.