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?


  1. I would think that one important drawback to using Faceboo.com as a development platform that I noticed so many stupid useless applications which makes me ignore most of them. I think a lot of people feel the same way.
    Can someone explain to me what Venture capital 2.0 is? Thanks.

  2. How would someone make money through this development?

  3. The Techcrunch post I linked to has a good discussion of the possibility of making a profit on Facebook.

  4. "Venture capital 2.0" is just a play on "Web 2.0." I guess the question is whether we can expect VCs to start funding small startups -- much smaller than the typical startup during the dot com boom.