The New York Times asks today “Do Web Entrepreneurs Still Need Venture Capitalists”. Robert Hendershott, a professor of private equity and entrepreneurship at the Leavey School of Business at Santa Clara University, says that venture capital is becoming obsolete, because the cost of starting a Web company decreases, thanks to cloud computing services and technology that entrepreneurs can rent instead of buy, many founders can finance a new company without the help of venture capitalists, using their savings, money from family and friends and credit card debt.
paidContent.org listed some opposite opinions. Boring to say, but I think both of them are right. Web companies can be started with small money. They still might need VC money in later phases, but we have now a problem in early phase funding from VC’s. Private investors or angels can also be professional and help company as VC’s. And it is not guaranteed that all VC’s can really help start-ups. There are some top level VC’s and a lot of totally useless. We must also remember that companies can get professional help from other sources than VC’s, you don’t necessary need VC to make an exit. I think we see changes in the whole ecosystem. And it is not only one solution that fits to all companies.
Tags: VC 2.0
