I've been watching in amusement some recent financings and realized the getting has never been so good when it comes to venture capital. If as a startup you're even remotely considering raising money, you should be out in the market. If for no other reason than to see what your business may be worth, get a business plan banged together and send it to some VC's.
Why do I think this is the case? Well, very simply put, it's all about desperation and full accounts. At one end of the spectrum you have the funds flush with capital. They have to be out there putting their money to work. They are all hunting for deals and are willing to take greater risks than at other times due to lack of investment opportunities. The competition is extraordinary and you may be able to squeeze into a fund you'd otherwise have no chance of getting into. This includes both existing, traditional top tier funds or newly formed VC's with no track-record yet but capital to invest.
On the other end of the spectrum, you having dying funds. Many VC's are running on fumes at this point yet still have capital which they can invest. Further, they are going for the hail mary passes right now. If they don't get a homerun in the portfolio fast, their fund has no chance of ever raising additional money or even returning money to their LP's. Again, your chance to squeeze into a deal. Yes, there are a ton of factors for choosing the right investor but if you are just in need of capital, get it while you can.
Outside of the VC's, a lot of angels remain in the market looking for deals as well and the corporate VC's have all ramped up operations or launched new vehicles. Everyone is chasing venture deals and there definitely are opportunities for second tier startups to get funded. If you can't get top tier VC's on board, you can always hit the second and third tier guys or the angels and corporate funds. If that isn't opportunity I don't know what is.
The VC's obviously aren't going to like reading this but you as an entrepreneur don't necessarily have to play fair. The tide will turn and we will soon revert back to a market where the entrepreneur is the one being taken advantage of. The VC's never cry about giving you bad deal terms so don't worry about taking advantage of them when the market is in your favor. That's the nature of the game and if anyone tells you otherwise, they are delusional.
Just don't forget that for every action there is an equal or greater reaction. Getting poor investors on board always has it's consequences and likewise, being a sub-par startup funded by a top tier fund brings with it the risk of being dropped quickly when markets turn.