But there's clearly a lot of people who still seek funding but can't find it, so how does that mesh with the idea that "there's too much money and not enough places to put it"?
Please come to me with $100k and I’ll offer you simply a guaranteed 0% return (no loss on investment) so I can pad my bank account and make “real” investors interested because it makes us look like we can manage our money.
It’s all smoke and mirrors and I wish I could get access to the same cheap money big corps get. $300k at 6, 7, or 10% interest is just robbery when public companies and home owners are walking away with 2-3% APRs
What you need is to prove your idea. No one is going to put $100k (or $100 million for that matter) in an untested idea, unless you have a relationship with an investor. And investing is a relationship business.
If a friend whom I trust and I know is a talented chef comes to me with a restaurant idea, I'll consider investing. If a random person comes to me, there is <10% chance (unless his food is absolutely amazing in every regard) that I will consider investing.
I'm happy to invest in a good tech business. But most things that I see just aren't great businesses.
You're likely in the US, but many EU countries have investment entities (generally funded by EU funds) that "give out" loans at 3% APR. If you want it, you can get it done. But there are very few barriers to entry. A good idea in need of funding will find funding.
https://www.rvo.nl/subsidies-regelingen/vroegefasefinancieri...
So my options are simply do something I don’t want to do to get investors (read: become an employee again), get an SBA Loan at 9%, bank loan at 6% or remortgage my house at 2%. I shouldn’t risk homelessness for cheap money and neither should investors buy let’s get real — $100k is a monthly rounding error for them
Sure we could have a discussion about how geography shouldn’t matter, but right now being physically close to the money is an important factor.
I think a much bigger arbitrage opportunity, one that e.g. YC tried to exploit a lot at first, is getting people who aren't looking for money, but would actually be a good investment, to try building a startup. That's why pg wrote so much about why people should build startups - he thought (and I imagine still thinks?) that there are way more good startups that can be built, if only more people were trying to build them.
Drive Capital (ex-Sequoia) is a good example. You might be surprised how uncommon this idea still is today.
If you could buy 10% of a company for $1mm in Chicago and sell that 10% for $1.5mm in SF the next day, that would be a form of arbitrage.
From wikipedia:
> the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a (imagined, hypothetical, thought experiment) transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit after transaction costs
The way I've seen the word used in startups is more akin to "Tim Ferriss style" geo-arbitrage.