Things turn around like this because the truth is that everyone (including and especially VCs) knew that things were overheated, and had been for well over year

Things turn around like this because the truth is that everyone (including and especially VCs) knew that things were overheated, and had been for well over year. But you still want to cut deals in a market that's overheated because if you don't someone else will, and there's a lot of money still being made. But once it turns over, the game is up. They know it's not coming back for another cycle for the same reason they knew that existing funding and valuation numbers were unsustainable.