[curiousgeorge]

Just from personal experience as an entrepreneur this comment is spot on. Actively looking for funding for most smaller startups is a waste of time - success-oriented entrepreneurs are always better off just starting the business and pushing it to profitability on their own. At that point there is not usually a scarcity of ways to get additional capital, because people will clamber over each other get a piece of a profitable growing company.

But at that point there is little sense in taking funding unless: (1) the business model expects exponential growth in costs, or (2) the founder wants to diversify risk or stop eating ramen by trading some equity for immediate cash. So self-selection is working against the interests of venture capitalists. It is bringing them into contact with people who spend significant amounts of cash to focus on getting funding instead of actually rolling out a business.

There are plenty of opportunities out there. If I can see them and the VC industry can't that is their problem and it is their job to solve. One simple case in point: how many times has a VC actively solicited pitches from people on Hacker News? I can't think of a single case. Yet the comment section on Umir's site is filled with VCs whining about the lack of decent business plans? Wow.