Counterintuitively this will lead to more monopolies since with less likelihood of "exiting" startups via mergers and acquisitions there'll be reduced interest in venture capital and therefore fewer startups capitalised to the extent that they can compete against large monopolies.
I don't think that you need VCs to be rational for what I'm saying to be true.
LPs will see this as reducing the likelihood of making their money back via investing in VCs -- or at least, this is a reasonable theses, and those that grow their customer's funds the most might make this assessment. In the long-term this would transform the landscape of VC which is downstream from institutional investors.
It can also have a cascading effect due to how reports and disclosures over investment strategies get shared and firms benchmark themselves against leading firms.
