Funding Requirements for Start up Businesses on an individual entity basis are trending down primarily due to technology gains and savings. This means that Startup business dont need to chase as much when raising capital.
One of the main reasons is that with smart phones, cloud computing, outsourcing, virtual assistants and shared facilities it just doesnt cost as much anymore to get a business off the ground. Business start up funding needed in the past to hire expensive software engineers and other professionals are no longer required as a combination of outsourcing and virtual operation considerably lowers the requirement for up front costs.
Angel investment and Private Equity investment via Capital Rasing Platforms like ASSOB are now becoming the dominant way for a company to fund a startup company, with the existing VC model being relegated to more of a latter stage role.
An interesting part of blog post “There is No Angel Bubble. There are Many Angel Bubbles.” is “As we say around here, “Seed is the New Series A.” The same companies that needed $3M to launch now need $30K-$300K to launch. So, it’s not surprising that there are many more of them.” http://startupboy.com/2010/12/01/there-is-no-angel-bubble-there-are-many-angel-bubbles/ Elias Bizannes goes further stating … “What’s changed he claims, is simply that instead of bigger Venture Capital (VC) rounds that are fewer in number, we’re seeing smaller but many more Angel investments occurring. In other words, the VC industry — not the Federal Reserve — are the ones that should be worried about this “bubble”.” http://eliasbizannes.com/blog/ .
In Australia we have also noticed at ASSOB that millions required are trending towards hundreds of thousands.
In November 55 separate investors invested $2,703,431.07 in 17 seperate companies on the ASSOB Capital Raising Platform.
- There is No Angel Bubble. There are Many Angel Bubbles. (startupboy.com)
- The Unbundling of the Venture Capital Industry (startupboy.com)