Doc Searls points to an essay on the changes in the VC/startup world (at least with respect to software):

Think about it. Free software and cheap infrastructure basically eliminates the whole raison d'etre for venture capitalists. Companies are cheap to start. All the stuff you used to need millions for is now free. That means venture capitalists just don't matter any more. It isn't about being lucky enough to get $5 million in funding; it's about starting something with the cash in your pocket. If you make something and it's good enough, the guys with $5 million in funding will come to you, because those guys are basically just money in search of intelligence, and it's a lot better to be intelligence in search of money. If you're intelligence in search of money, you'll choose the best way to get money. The best way to get money isn't to find some VCs to beg, borrow, or steal from; the best way to get money is to make something people will pay for. So if you're intelligence in search of money, you'll make stuff people want to pay for, and you won't even bother with the VCs, because they need you more than you need them.

There's some truth to that, and Avi Bryant's venture is an example of it. However, it's a narrowly focused truth - specific to the software (especially web based) business. It's not at all true of things in the bio-medical field, for instance - where there are still serious costs to getting off the ground. So this is a good point, but it's a limited point. Don't say goodbye to the VC folks completely - just watch as they exit the software field.

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