Samuel Angus, corporate partner with Fenwick & West, was recently quoted in an American Lawyer Media blog entry entitled, "Venture Capital 2.0."
During the recent Web 2.0 Summit, Angus explained that VC investment is not as crucial a funding component as it was during the first Internet boom, because it costs a lot less to launch a site today. Web 2.0 start-ups, often self-sustained through online advertising, can more easily get off the ground through bootstrapping by using angel investors, family and friends.
Bootstrapping offers two clear advantages: increased control and a higher percentage of profits when a start-up is sold. On the flip side, because the Web sites may grow slower without venture capitalist funds, the overall selling price may not be as high.
"It's a harder swing at the ball, hoping that it'll grow into a really big business," Angus said.
Read the complete entry, by Recorder intellectual property reporter Jessie Seyfer.