Can entrepreneurs counteract bad government?

I believe our economy is stalled because entrepreneurship is restricted below its natural rate in the US market. You all likely know, despite what you might see in nightly news, that new business starts have declined significantly since 1970. While Silicon Valley does well in select areas of innovation (Software, Media, Entertainment), there are many other industries (Automotive, Healthcare, Energy, Aerospace, etc) where innovation is more limited. We do have a lot of progress, but are we reaching our economies full potential? I am an active member of the venture community, as an entrepreneur and venture capitalist. There is near zero friction to getting companies funded in Silicon Valley. It is nearly impossible to get a company funded in St. Louis MO. Silicon Valley says that is because the entrepreneurs in St. Louis are not good enough. There is not a critical mass. I believe this is partially true, but I also believe its because 1) The venture eco system everywhere but Silicon Valley is immature 2) The method of venture for software is different than the method of venture for agriculture. New Agriculture is going to come from St. Louis, not Silicon valley. I have in my mind a list of frictions, all which limit the ability for new ventures to grow. Some of these are regulatory - limitations on general solicitation, burdens of ACA when a company grows, etc. Others are collusion - big companies and government working together to set the market dynamic. Further frictions come from the players of the ecosystem - simply not having enough skilled people who understand the decision making dynamic in an early stage company. As I look at the system of innovation, I feel a need to make these frictions go away, somehow. More broadly, while 3,800 new ventures are funded each year by VC, my intuition says it should be 8,000 (Why I am not sure, its intuition). In each area people look to government to solve a problem, I see market failure. No one is looking to government to make a smart phone, but they do want government to improve healthcare. No one is looking to government to make Netflix (though rent seekers are looking to government to expand access to Netflix). If there were an Apple of healthcare, no one would turn to the government for a solution. They might want their Obama Phone, but in bulk, people would ignore government. Healthcare, in its current instance, is clearly a corportist/rentseeking/socialist cabal. People are right to point out the need for deregulation. New Ventures though offer a better way. Ventures can often overcome incumbency, totally changing the landscape without attention to regulatory reform. Uber is in part doing this by creating an uprising of political counter force because of its positive externalities. So, in the murk, I see a way to put Washington on mute, levering entrepreneurs to change the course of multiple industries. Changing that course through innovation first, regulation second. I sense but can not prove that we are grossly under-investing (at the venture level) in industry sectors other than software, entertainment and media. The frictions are part of the problem, early stage investment specifically, but there are others. While I am working hard on the funding problem, I am trying to figure out how to build an uprising around the other challenges in the market. As an intellectual exercise, I am also asking "What can we do that removes a friction, but does not require Big Company or Government agreement"? I will leave my initial thoughts at this. I welcome your thoughts.

link: http://bit.ly/1Jj32cd