It’s the biggest myth in American entrepreneurship, the idea that we’re riding a bubble of unprecedented startup funding that’s driving new innovation.

But when you look at venture capital in the United States, the confusion is clear. It seems like we are investing a huge amount of money in start-ups. Everywhere you look, there are private companies like Uber, Airbnb and many more, cranking out massive amounts of revenue and driving valuations to heights not seen since the Dot-Com Bubble days. The simple fact that the term “unicorn” was adopted to describe start-ups that are valued at $1 billion-plus is proof enough that valuations are off the charts.

But despite all of these positive signs, all isn’t well for U.S. entrepreneurs.

The practical reality is that we face at least an $8 billion a year shortfall in early-stage venture investing in this country, and it’s getting worse.

Why?

In part it’s because too much money is going to too few companies. According to the National Venture Capital Association, VCs invested $69.1 billion across 7,751 companies in 2016, the second highest yearly total since 2000. But nearly half of that total went to just one industry: software (48%). What’s more, 60% went to just three metro areas: the SF Bay Area (40%), New York City (10%), and Greater Boston (10%).

What about everything else?

Those companies simply aren’t getting funded at these levels. Healthcare, agriculture, manufacturing — innovation is everywhere, but VC funding isn’t finding its way to those businesses like it should.

Innovation’s New Reality

It didn’t used to be like this. In the ‘50s and the ‘60s, in every single town in the country, somebody was starting a business. There were still strong local banks and there were local investors interested in backing local, job-creating enterprises. Part of this was due to inspiration from people coming back from World War II, all focused on taking on new challenges, but it was a powerful combination of people willing to be entrepreneurs paired with banks and other investors willing to back them. It was an economic engine that turned out new companies all across the country, name brand companies that you still see today. They’re McDonnell Douglas, they’re Boeing, and so many others, all of which grew dramatically during the ‘40s, ‘50s, and ‘60s.

But after that, something changed. The entrepreneur-investor-economic growth virtuous circle stopped as we moved into the ‘70s and the ‘80s, and it has never come back like it was before.

A combination of factors led to this shift:

Silicon Valley started taking off in some novel ways around that time, and so a lot of focus was put on Silicon Valley as THE place for innovation, which drew more investment attention there from the rest of the country.

There were some challenges in our financial markets, so over time we have made small corrections to the ways the markets work that have restricted what banks can do and limited the opportunity for investors to get involved with new companies.

The corporations that started during that big postwar push have matured and moved out of the entrepreneurial phrase over time. They became bigger, and they built plants and factories and different things as they grew, leaving behind the need for constant innovation. As a result, the notion of entrepreneurship as a driver of economic growth quieted down a little bit.

All of this led to the concentration of business development resources and talent around Boston, Silicon Valley and other hubs. Somehow, along the way, we forgot that there are smart people, with good ideas, throughout the rest of the country.

Investors Need to Branch Out

Over time it has just gotten worse. Entrepreneurs in far-flung places like Kansas City, and Orlando, and Portland realized that they couldn’t get access to capital at home so they picked up and moved to Silicon Valley, moved to Boston, moved to the areas where the capital existed, and they pulled a lot of talent out with them.

It became a self-fulfilling prophecy. Investors couldn’t find good opportunities to support in their hometowns because all of the innovators were leaving, so they focused their attention on the known quantities of Silicon Valley and software companies for their investment dollars.

And now we have record amounts of VC funding going to just a small sliver of the innovation market, and an $8 billion shortfall in entrepreneurship support nationwide.

That’s what keeps me up at night.