No. A VC fund invests each dollar precisely once and then attempts (over the next 10-15 years) to return those funds to investors when they cash out.
Maybe VCs in France will completely restructure their business to avoid this massive tax (presumably incurring lower returns in the process). Or maybe they will just invest outside France. Either way, this is not a small problem for them.
Money is fungible and people are creative; My expectation is that, in the middle-run, that they will be make this no more than a small problem for them.
What are their investors doing with the money? If they intend to pile up a bunch of dollars and swim in it like Scrooge McDuck, then yes, that pile might shrink as a result of this law, but I expect that represents a relatively small fraction of institutional VC money.
As the parent said, if they sell to retire, the income isn't taxed so highly; if they sell to cash out of this investment and put (at least 80% of) it into something else, then the money is being reinvested, and hopefully can be handled as such in the accounting.
