What's supposed to replace VC, exactly? No one likes having to deal with "the money problem", and there are obvious inefficiencies and flaws in the current VC system, but I don't see any obvious solutions or how anything better could be developed at scale.
This is why I qualified my post with "at scale". I don't think there are enough qualified, technologically knowledgeable angel investors out there to cover a significant fraction of the startups that need funding. Keep in mind, also, that although the economy will recover, the glacial retreat of the 20th-century big-box corporations is a rather permanent state of affairs, which means that there will be a lot more people trying to start companies, while the number of wealthy individuals/angels will not increase at nearly the same rate.
its possible that VCs can't assemble the level of funding needed to attack the energy market (for example)...these investments will have to scale out to the hundreds of billions with very long time horizons for returns. most likely this stuff will have to get federal funding, and much of it already does from nsf, doe, darpa, etc
