The VC funding model is broken in general - it's not only bad for open source projects, it's bad for most projects.

Modern expectations that a VC pumps in millions (or billions) of dollars and then extracts 10s of billions a few years later is an unrealistic expectation for most companies, and forcing everything into that model is killing off a lot of projects that could be successful on a smaller scale. The pressure forces small companies to sell out to bigger corporations, consolidating the industry into a few huge players who gate keep and limit competition and choice.