You are forgetting the lag effect. It will take a while for this to trickle to the VC market. Consider a situation where most of them have already raised funds

You are forgetting the lag effect. It will take a while for this to trickle to the VC market. Consider a situation where most of them have already raised funds. They may become more picky because of reanalyzing long-term effects (shittier IPOs), but they will still have money to invest. If you are worried, perhaps you should consider the alternate: bootstrapped model. It seems that even though bootstrapped companies grow much slower, these companies are a lot more healthy and aren't regulated as much by financial markets (no boom or bust models).