Yes. So many articles about funding and startups live in this small little bubble of thinking that all startups make a silly little app and that their trajectory will be that of the social mobile craze a few years ago (get users, retain, monetize).
I run a hardware startup and this is really obvious as most funds simply can't understand how you can make a thing, sell it, and grow the business to a large size, as if selling atoms instead of electrons is so weird. Even when that hardware has its core value in software.
We are lucky enough that we already make money and don't need VC. From the meetings that I have been asked to, I get this sense that many VCs won't seriously look at businesses that do anything substantial in the seed to A funding stages. There is no shortage of ppl that will write a 5M check with a couple other similar sized checks, but few will write a check for 500k/1M.
The classic descriptions I have always heard are seed = build and find product market fit. A = with that fit, do your first bit of aggressive growth.
But when you talk to folks right now, their requirements for an A seem to be that you have already grown a lot. And if you're a cashflow business like ours, it leaves me scratching my head, as at that point I dont need their money and def won't take their 'raise another seed' type offers.
The number of times I have gone into meetings, been told that they werent sure if it was a 1B business is my favorite. These guys dont want to buy shares but they and their buddies buy the product! lol
I think early VC is scared. They have no idea what makes sense and what doesnt. They have all these rules of thumb that apply to a narrow type of company and now that the barriers to entry on those are so low, the noise is overtaking the signal.