Fifteen years ago it took some serious cash to help a fledgling tech company get off the ground. You need a few million dollars of seed money for hiring talent, office space, equipment, marketing and promotion.
But today the technology costs of getting started has dropped dramatically, reports Smartplanet.com Thanks to the rapidly shrinking costs of hardware, along with trends such as cloud computing and social networking, it now costs a mere fraction of what it once did to get a new venture going.
For example, GigaVox Media, a podcast technology company, used Amazon Web Services for processing power, messaging and storage in their start-up phase. Total cost for their first few months of operations: $82. Others, such as software makers 280 North Inc., needed only a half-dozen computers and a roof overhead. They kept costs down by using free code available on the Web and renting storage from Amazon.com Inc.
The Smartplanet article cites figures from the National Venture Capital Association, which estimates that the size of the average venture round has shrunk by half to $6.3 million since the dot-com bubble in 2000. But there are plenty of start-ups getting launched for far less than that.
Are we in the midst of an explosion in small start-ups? And for people working in Venture Capital jobs or looking for one, will the shrinking costs of starting a tech firm lead to a similar increase in the number of smaller VC firms? Let us know your thoughts in the space below.
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