For the last decade VCs have been the most coveted “old-boys club” for the money-thirsty entrepreneur. They represent the holy grail of funding and the glimpse of success. Unfortunately, once a pioneer leaves 4 quarts of blood on the alter, 60% of the startup equity is vanquished.
Today venture capital continues to rise, yet the cost of getting a startup off the ground is trending down (at least for most startups). Angels and the more adaptable VCs (CRV and YCombinator) are jumping in with beta-testing money broken among many, many startups. Old School was large sums of money among fewer startups. Finding the next Google or Myspace is becoming exceedingly difficult in the crowded Web 2.0 space. According to the University of New Hampshire 2006 angel funding comprised of over $25 billion of the startup pie.
Micro-venture capitalists, informal private investing and peer-to-peer funding (like Startup Addict) will continue to lead this new paradigm. Determining if a startup is a failure or success before $3 million dollars in investment is evaporated. This is as beneficial for the entrepreneur as it is for the the investor. Gone are the days of million-dollar a month burn rates….sooo get down to business and then do it again.