November 11, 2005

Follow the Money

Recently I've been in on discussions with Venture Capital Firms on behalf of a client. As a result we've been able to gain a good sense for where the money is going this Fall. The Startup Journal is bang on when they say "Later-Staged Companies See More Venture Funds". VC money is flowing to established companies.

During these meetings we also heard that "Greed isn't in the market right now and without greed, Angel Investors won't come out". Click
here for the Wikipedia definition of Angel Investor.

So what do you do if you're an entrepreneur with a great idea? Your best bet is to pursue the "friends and family" funding route. If you are part of an early and intermediate stage company you will have to bootstrap your product development. Bootstrapping is when entrepreneurs start and operate their business with little or no money or assistance from outside investors. This can be done -
just stick to the fundamentals.

If some of you reading this are like me and see a great green field opportunity here. The movement of capital to later-stage leaves a lot of amazing early stage projects open for motivated investors. Go for them while you can.

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