One of the misalignments between founders and VCs that's rarely discussed:
VCs are not really in the business of the finding the best businesses
They are in the business of finding the second best businesses
e.g. Imagine a business that can take $1M of invested capital and generate $100B of market capitalization value (a 100,000x return on invested capital).
VCs generally are attempting to "return the fund" with each investment
So these businesses on the most pareto optimum frontier of extreme capital efficiency and return profile are not interesting to VCs since they cannot get enough of a "bite size" (ownership % or investment threshold)
VCs want to be able to deploy millions or tens of millions of dollars and hold ideally 10%+ ownership stake and maybe settle for 5% minimum
Note that is not the case for prop capital or angels, since the threshold is the counterfactual deployable investment ("opportunity cost" of the investment)
As capital efficiency increases for software venture landscape, it will be interesting to see how much of return landscape is weighted toward the first and second type of businesses