Who to believe when 2 opposing views miss the point about VC funding?

StartUpSmart published an article recently about the state of VC in Australia, and called out TechCrunch on some key data. 

http://www.startupsmart.com.au/financing-a-business/venture-capital/techcrunch-calls-out-australias-venture-capital-issues-investors-respond/2014042312147.html

However, I think both groups miss the point. As i highlighted in the (improved) comments.

 

"Its a interesting fact that Australian startups are seeking funding from overseas (typically the US) even at an earlier stage. Is it because Australia is not prepared to invest in Australian companies?

According to the last year's PWC report, the total amount invested in early stage startups in 2012 was $53m, and credible sources put the amount 2013 figure at 25% less, or $40m. 

The astounding fact is that there's a majority of founders, possibly 1200-1500,  (>80% of total new digital) startups pitching for this very small pool of funds.

Does this make you wonder why?

Perhaps its because investors know something that VCs, or us as founders, don't. Startups in Australia have yet to tap into our core strengths in the markets in which we have so much domain expertise. 

I hear so often that we should try and become more like silicon valley. With a (relativity) small consumer economy, we punch well above our weight (in GDP terms) in B2B/B2E. Eg mining, agriculture, manufacturing, healthcare, services, forestry, distribution (the list is very large) etc, yet we as a startup eceosystem, are all still focussed on building and finding 'unicorns' in consumer markets.

And we have at least 2 of the largest untapped funding pools available in the world. 

When we (startups) start building in sectors in which we can hold our own, funders (high net worth individuals, wholesale & retail funds, corporate investors and overseas investors alike) will flood the market with fiscal 'solutions'. 

I say that the fault is not one of funding, but of our own making, by not creating truly fundable opportunities.

As founders, we need to look to our areas of expertise, and hold our ground with conviction, when pitching these new ideas, instead of bending in the direction of every new breeze that blows. 

Instead of looking without, we should first be looking within."