There's a lot of buzz lately around Silicon Valley about angel investors, startup accelerators, crowdfunding, business model development and much more.
A typical claim is that the VC business model is broken. Another one is that VCs have just not adjusted to the modern needs of their companies.
As I am not in the valley, I watch the changes somewhat from afar, but not too far. This gives (IMO) an excellent perspective on things, and one of the interesting phenomenon is how the VC industry is funding its own demise.
If you're reading this blog and know nothing about VCs (venture capitalists), here's a short explanation: VCs take money from investors, and invest it in startups. Their (claimed) expertise is allocating investments smartly in a way that funds groundbreaking innovations that bring huge returns to their investors.
The industry started in the early 1960s (late 50s even), and had funded probably every large and innovative technology company you have heard of or not, including DEC, Apple, Cisco, Google and many more.
In the last 5 years or so, a big shift in the industry can be observed - much smaller investments are needed to start a company, and VCs many time stay outside the game of the smaller company creation and exit process.