YC recognises that good teams can get started with just enough funding to work uninterrupted for several months on their idea. Building features and talking to users - full time.

Being as though YC's model is held in such regard - aren't there more angels/investors considering higher volumes of smaller funds?

Is it just not worth writing out the paperwork for such sums of money?

There's this huge chasm between bootstrapped startups, few & far between incubator places and so called 'small' seed rounds starting at $250k.

It seems that crowd-funding is the only thing bridging such a huge gap.

What funding sources do you know of that offer basic just-enough-to-get-started type funding?