Should start-ups rely on online advertising?
27th May 2009
Venture Capitalists in the US have put over $5.1 billion into web-based start-ups since 2004 according to a report in the New York Times today. They have done this on the back of an assumption that online businesses will be able to attract advertising revenue at a rate that ensures the growth of value in their businesses.
With the global downturn now biting into advertising spend, the article goes on, this is no longer a viable option for web-based start-ups. Instead, there is a move by internet entrepreneurs to raise money from other sources - like subscriptions or sales. Venture capitalists looking for investments in these types of businesses now, according to the article, are looking for at least two other revenue streams beyond online advertising to ensure that the business model is secure.
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BBC finds that recession sparks new business ideas at an event in East London. Click here to find out more.
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