Tech trends and business ideas

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Friday, May 26, 2006

Web 2.0 VC scene changing ?

There is, however, some evidence the VC environment is changing. For one, Web 2.0 entrepreneurs don't need large amounts of money because they can use free open-source software, and low-cost hardware and network bandwidth to develop and distribute a new Web-based service.

This means entrepreneurs can take an idea and create a business without worrying about whether they can get financed. This is a healthier approach because the start-ups that are successful in attracting customers and generating revenue have better leverage when they decide to pursue venture capital to jump-start growth.

At the same time, some VCs have started to realize they need to behave differently if they want to play in the Web 2.0 world. They need to be more aggressive, they need to take more risk and they need to accept the reality that financial success could come from a variety of small investments rather than a few large opportunities

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