| This is HUGE. This is tsunami in the making. Small | | | | drove the venture capital industry to the dotcom |
| business financing is on the brink of tapping into | | | | disaster is back with a vengeance. Seems like the |
| billions and billions of dollars that previously shut it out. | | | | internet and venture capital are two lovers that just |
| The signs are quiet. One venture capital firm | | | | can't stay away from each other for too long. |
| announced that it had just funded an internet startup | | | | And this time it makes a lot of sense. Most internet |
| for $250,000. Another announced it had just brought | | | | businesses can begin easily with way less than a |
| in a new partner whose previous background was in | | | | million in investment. Some need no more than a |
| angel investment. A third announced it would be | | | | couple of programmers and a marketing person. With |
| sending a senior partner to a business plan | | | | the right concept, the success comes rapidly and the |
| competition. | | | | internet business becomes self-sustaining in no time |
| Don't get me wrong. Every one of these things has | | | | at all. And, if you take a look at the internet roster, |
| happened many times before. But this time it is | | | | you will see a long list of very successful companies |
| different. This time they are announcing it. | | | | that started on next to nothing. |
| One of the closest guarded secrets in venture capital | | | | This is the success that the venture capital |
| is that venture capital firms do indeed make small | | | | companies are going after. Percentage-wise, there |
| investments, and have for as long as anyone can | | | | are huge profits to be made. |
| remember. These small loans are typically made to | | | | Smart venture capital companies are streamlining the |
| startups that just need a jolt of cash to get to the | | | | application process. One, in fact, only requires the |
| first stage, to give them breathing room to get a | | | | approval of one partner for investments up to |
| prototype made or have a marketing study | | | | $250,000. |
| completed. The venture firm typically takes a first | | | | The business plans for these internet companies will |
| option on future investments for these small | | | | be like none other. No 200-page bound treatises here. |
| investments, plus a bit of stock or interest or | | | | Nope. |
| whatever. | | | | Short. Sharp. Nimble. A presentation that |
| The reasoning behind the small investments was | | | | demonstrates the entrepreneur's grasp of the |
| never to make money, and these investments didn't | | | | industry and its rapidly evolving nature is the business |
| make money. If everything worked out okay, the | | | | plan of the day. |
| small company could apply for significant venture | | | | An online demo is essential. |
| funding when the time came. | | | | And the power to turn all the equipment off and look |
| Well, now there's a new kid on the block. | | | | the venture investor in the eye is also essential. |
| This time the expectation is that these small | | | | Those entrepreneurs who can provide vision and |
| investments WILL make a return, a goodly return in | | | | knowledge are sitting in a pot of jam. There are |
| fact. | | | | literally billions and billions of dollars waiting for you. Go |
| This time the small investments are aimed squarely at | | | | get it. |
| internet startups. That's right - that industry that | | | | |