This is not directly true. Vanguard mutual funds provide 0.05% annual fee rather than ~1% annual fee to access the average return of an index (whether the index is the S&P500, or every publicly listed company in the US). While the low-cost has empirically provided a better (compounding) return for investors over the decades, Silicon Valley angel investors and VCs have generated their wealth from their own businesses, and re-invest some portion of it directly into the next generation of unlisted companies. The extra 1% annual return gained by accepting the average stock market return (at exceptionally low cost) is not what's driving startup investment.
That said, the lower expected average market return (because the stock market being relatively highly valued, after the recovery from the 2008 crash, due to both record low interest rates, and to some degree a blind movement of capital towards index funds) may have some impact on temporarily increased VC dollars, trying to chase some kind of reasonable return.
And whereby there were previously only actively managed funds, the creation of that industry substantially lowered the cut money managers got from person wealth management.
Thereby leading to generations of people with more control over their money and willing to take risks, where a professional money manager would have little incentive to invest in startups with wealth locked up in their funds.
The move away from pensions could have been a veritable smorgasbord of fees for actively managed funds, but Vanguard provided broad access to something just as good (and more often than not, better[1]).
1. https://www.fool.com/investing/mutual-funds/mutual-fund-basi...