I have studied the London Startup market for over two years, and in a hands on way.
The big issue is that startups don't perceive there are three stages:
1) Ideation - Bootstrapped
2) Growth - Tech Platform - £25K
3) Accelerate - Investors - £250K+
Far too many startups have a fuzzy view of the market place, and believe they only have to show up with an idea, never mind if they understand what traction is, and they will qualify for big money investment.
The market place stories of Facebook and Twitter, the less than 0.1% of all cases where this did happen, and an idea was backed to the hilt for years before it became profitable, are in fact very unhelpful.
The proliferation of accelerators has meant the market place is awash with talk of startups at stage 3, but far too little appreciation of how to bootstrap through stage 1 towards a workable opportunity that solves a real marketplace problem, offers value for money and yet is both sustainable and scalable.
The early stage startup has to learn all of that just to ge through stage 1 and achieving traction.
What we need, what I'm trying to achieve, is more discipline, structure and better marketplace education to understand and practice in stage 1, so as to successfully reach traction.
The issue for every tech team and accelerator is that bootstrappers have to work really hard to be able to fund that activity, since a product with no traction doesn't generate a sufficient income.
Both accelerators and tech providers need to do far more to support the mouth of the funnel, the ideation process, without simply raking off fees for themselves to support "current lifestyles".
Richard Branson is running a Pitch to Rich event with prizes right now, we'll see what comes of that.