That's not true. Today, a lot of funds, particularly larger ones, are placing bigger bets on companies in later rounds, which is arguably a smarter strategy than trying to place lots of small bets earlier in the hopes that you'll get lucky and discover the Facebook or Twitter and have put enough into it to make your big percentage return a big absolute dollar return.
Taking Twitter as an example, its last round of funding in 2011 reportedly entailed a $9.25 billion valuation according to PitchBook. If its valuation at IPO is north of $20 billion, as some expect, the investors who poured $400 million into the company in 2011 would more than double their investment. If you look at Twitter's S-1, a lot of the biggest stakeholders were investors in Series C and beyond.
"...placing bigger bets on companies in later rounds, which is arguably a smarter strategy..."
Is it necessarily a smarter strategy? To me just seems this is the latest swing of the pendulum up and down the risk/reward curve. If factors change in 5 years, their "smart strategy" could begin to include more emphasis on consumer A's.
It's a smarter strategy at times I would say. For example, when the Fed is intentionally inflating a stock market bubble ala right now. That provides an excellent window to ride the public market to massive valuations completely unsupported by fundamentals (eg LinkedIn, Tesla, Splunk, Twitter, Facebook etc).
It's all fun and games until the stock market crashes again.