For Start-Ups, Web Success on the Cheap

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This is kind of old news if you’ve been following the “web 2.0” application but it’s in the Times and offers a few interesting numbers. For Start-Ups, Web Success on the Cheap reviews some of the new investment models being used with startups, basically it’s way way cheaper now than it was with bubble 1.0.

And as large firms try to go small, they are encountering a new crop of competitors who are happy to bankroll start-ups on the cheap and are fueling the current Internet boom. They include a large pool of angel investors and a number of small venture funds whose specialty is to invest tens of thousands of dollars, or hundreds of thousands at most.

Joe Kraus is quoted a couple of times and it reminds me of something he said on The Scoble Show where he mentioned that he does consider this a bubble but that it’s very different from the first one because private “normal” investors aren’t exposed in this one, moms and dads aren’t loosing their savings, the only ones who can lose money are the entrepreneurs, angels and VCs (and even them in smaller amounts) so even if/when the bubble bursts it will have a far more limited effect. This bubble is just web people going nuts, not the whole economy being accelarated by insane IPOs. (I’m paraphrasing here obviously)