Professional, independent observers think otherwise. VCs will not do a series A investment in a company unless they believe it has the potential to be really big. So far over 20 YC-funded companies have done series A rounds, and more surely will.
However, it's not necessarily the best strategy for the average startup, which may find itself destroyed as grist for the VC money mill.
Fortunately, there's a place for both "next big thing" companies as well as "next little thing" companies. And there's nothing wrong with doing bread-and-butter business helping entrepreneurs realize their dreams even if it doesn't result in gigadollars and news coverage on CNN.
It also provides some context to the conversation. If only the companies most likely to become giga-corporations ever received investment capital how many opportunities would be passed up? More so, would a world populated mostly by gigacorps be a world you would want to live in?