Tuesday, July 10, 2007

Small, quick investments in network-based applications -- venture capital 2.0?

Using the Internet as your development platform drastically reduces the cost, time and risk of building an application and starting a company. For an example, check out Techcrunch's discussion of venture firm Bay Partners' investment fund for people building applications on top of the Facebook platform.

Bay Partners is targeting tens of investments from $25,000 to $250,000 using a flexible, fast-track approval process. There will be many folks applying for this funding -- Facebook says 40,000 developers have requested keys to create applications, and over 1,600 have already launched. Many of those 40,000 are just playing around with the platform, but Bay Partners is hoping to find around ten investment-worthy applications.

Is this venture capital 2.0? What are some of the drawbacks to using Facebook as your development platform?