This is really about boutique/niche product manufacturing. There's usually not a reasonable path to becoming a billion-dollar company, at any degree of risk. That's what "startup capital" wants... to get in on the ground floor of a billion dollar company. They want that 100x return. You're not going to get a 100x return manufacturing a better rifle scope or a boutique handgun.

This is what banks are for. Start business on scraped capital, show real customers and real profit, then go to a traditional bank with a traditional business plan for scaling capital.

Make a consumer product banks can copy and try to prove its viable and I think you'll get that feedback.

That’s also very tangential to the fact that while some areas of banking, finance or weapons dealing may be dominated by large institutions, there’s plenty of other areas that are not. Stripe is a perfect example in how they started out by capturing a retail market that was outside the core business of the large players. Nobody would look at their value prop and say “finance is overfunded”, because that ignores what area they were actually trying to compete in.

If you wanted to make a startup that looked to innovate retail weapons trade, then no investor is going to tell you “you’ll never compete with Raytheon”, because no matter how big they are, they don’t compete in retail weapons trade. What they would more likely tell you is something like “we don’t invest in that vice industry”.