You paint a very bright picture for stratups and a dark one for VCs. While as an entrepreneur myself, I wish that was the case, in reality though, the two are tightly coupled.
Even though startup funding-needs are smaller these days, very few entrepreneurs can find a team who would work for free all the way to profitability. In fact, VCs today are able to get more equity for less money.
But the fundamental problem is that the average time for exit is getting longer, mainly due to the poor stock market condition, where IPO have almost disappeared and corporates are willing to put smaller amounts for M&A.
Once the market will bounce back and stratup will have a more promising outlook, I'm sure you'll see VCs happy to invest and startups happy to take the money.
Mor Sela Co-Founder and CEO http://www.ProCompare.com