Venture capitalists lend money when banks won't

For several years, Angela Corrieri has met with firefighters, police and other first responders to pitch her digital wireless cameras. They can transmit an image in real-time back to headquarters.

It's an idea that could have broad appeal, capturing a segment of homeland security dollars that's often overlooked: local and state government contracts.

But she needs more than the kernel of a good concept, she needs money. Ms. Corrieri estimates it would take $2.5 million to get going on a major development deal.

A decade after venture capital investors provided the money the fueled the dot.com boom and bust, Ms. Corrieri...