With venture capitalists pumping nearly $10 million into deals in the first quarter, it's hard to imagine VCs becoming obsolete anytime soon. That's the highest total since the second quarter of 2001, according to research firm CB Insights.
But with more entrepreneurs turning to crowdfunding—equity crowdfunding, in particular—VCs have to work harder than ever to get in on the ground floor with start-ups, and some are falling behind.
"The biggest losers, and those that have been made obsolete, are the slower-moving funds that offered little more than a check," said Scott Wolfgang, partner at Quotidian Ventures, a seed stage fund in New York City. Deal flow for these firms has dried up, as they missed out to angels and large funds willing to make early bets on hot start-ups, he said.