Umair has a sharp post about how he thinks the general VC community is missing the Web2.0 point and failing in its critical role in early stage value creation.

I think VCs are the new chasm because they are so scarred by the bubble, they’re scared of new concepts and new Big Ideas – they are paralyzed into trying to "monetize" yesterday’s stale, tired, old ideas. Yes, many venture guys have always been vultures – but a good portion were also fairly visionary. That fire in the belly is gone – the passion to disrupt and change things has disappeared.

Ultimately, this death of ideas, novelty, and renewal is why we end with the VCs thinking 2.0 is about technology; why we end up with the guys who should have an economic vision failing to create one; why we end up with a whole community of very smart guys, who, afraid to step outside their narrow comfort zone, are missing the obvious and enormous tectonic shifts rumbling through the economic landscape, where innovators outside are using the real 2.0 – markets, networks, communities – to disrupt new industries almost every week.

I think part of the issue is the Zero-Billion Dollar Fund phenomenon I’d blogged about.  Increasing capital markets efficiency, the proliferation of sophisticated angels, the appetite of large web companies to acquire early-stage companies, and Moore’s Law are combining to make the VC’s job more difficult.  Add to this the fact that the sector is still fairly young, with many funds still being run by the first generation of GPs.  Umair is being tough on the VC community, but I think he’s right.