May 14, 2009 | Misc

Do Web Entrepreneurs Still Need Venture Capitalists?

The Bits blog at the New York Times is reporting that entrepreneurs don’t need venture capital as much as they have in the past.

The costs of running a web application are always coming down due to Moore’s law. The lowered costs can be met by savings, borrowing from friends and family, and credit cards. Some other points, not mentioned by the article include:

A plethora of online advertising services makes it possible to get some funding even in the early stages of a startup’s life.
As time goes by, server and client web frameworks are getting more comprehensive, making it easier to focus on the unique aspects of a given web application. Since it’s easier to write apps, you can often do without employees — and payroll, making it easier to work without capital.

The blog entry does concede that startups making tangible products, such as in clean energy, do still need venture funding.