The lack of VC funding might change the incentives for startups for the better.
Rather than build a startup to raise funding, they might build a startup to sell products.
Rather than build a startup to raise funding, they might build a startup to sell products.
I agree that the incentive system for startups right now is broken, as so many are simply aiming for an IPO before they're exposed as jokes but there's an inherent advantage to being in SF for any type of fledgling tech business.
This maybe the wrong way to think about it. Outside of hard-tech I see very few companies that are benefitted by building in a void.
Though your larger point still stands, once you have product market fit, the funding regime in SF gives an unfair advantage to companies that know how to use it for their particular domains.