Comment by evanwise

The only possible reason for barriers to entry is regulation? There are many industries where startup costs are high for reasons intrinsic to the business and margins are relatively low so you are unlikely to get investment from outside sources. Grocery stores for example. You are trying to apply a toy model from econ 101 to explain the behavior of complex real world markets, and when the model doesn't fit you invent bogeymen to blame. This is more like religious fundamentalism than any kind of science.