When I was young in the 70's artists either entered into a contract with the few major labels, or they remained unknown. The oligopoly owned the big studios, they had the major venues sewn up, and they had the radio stations and DJs. That's not my idea of willingly and freely.
I've never dealt with VCs from 'the inside', so it's certainly possible they're just as slimy. I suspect they aren't, because there's no distribution choke point as there is (was) in music, so they can't effectively enforce shenanigans. (They also don't lobby nearly as much, get weasel-words inserted into legislation on the sly, nor have they been found guilty of horiztonal collusion and anticompetitive practices. several times)
But even if they were, equivocation doesn't validate the correctness of either market. And the existence of contracts certainly don't somehow validate the way things work.
You're right, Artists still feel they have to sign "that" contract, in order to make it BIG. This is because of the misconception the music industry has put out there, knowing too well that artists will fall for it.
Good analogy on comparing record labels to VC firms, but I believe one is still more evil-er than the other.