You can't talk about VCs generally because there's such a difference between the good ones and the bad ones. The good ones serve their investors pretty well.
We'd never compete with VCs, incidentally. It's a completely different world from ours. They invest on behalf of other people (or more often, institutions). So while they have huge resources at their command, they have to answer to their investors, and this makes them excessively conservative. We much prefer using our own money, even if it limits what we can do.
YC should kill all the sub-par VCs by scaling up massively and taking their billions in funding away.