Do Web Start-Ups Need VC Funding?
Do Web Start-Ups Need VC Funding?
Has the necessity for venture capitalists dropped for Web start-ups?
The New York Times reports yes.
What’s one of the catalysts for this change?
Cloud computing: allowing founders to start up their own companies without the help of VCs.
Because web start-ups are usually estimated at starting for less than $50,000, the need for outside funding has decreased.
A prime example that the NY Time article mentions is the Apple App Store, which allows developers to create and submit an app, then see how it fairs in the marketplace.
Who is going to seek out funding when one can simply submit their idea and see how the public receives it through a prominent company like Apple?
Additionally, it now seems that when VCs are still involved in Web start-up funding, they are disconnected from the actual entrepreneurs.
This disconnect stems from the fact that less time is needed for Web start-ups to evolve and fund their ideas than before.
What exists now? Investors that specifically invest in the area the Web start-up pertains to: like iFund, who invests in iPhone app developers.
So, it seems that entrepreneurial internet developments are creating a new trend of self-reliance and independence from funders.
This makes sense. Now, Web start-ups can brace themselves accordingly if there is another (god forbid) dotcom bust.
Self-made? Looks like the way to go.
