Tuesday, April 10, 2007

Elance revenue and Ebay Exits

web2.0 ventures are a dime a dozen in the current bubble that we have here in the Valley. The success of a few social networking, data services over IP, and media sharing web services has wiped the slate clean of any hesitance that was a result of the 90s. However with so many ideas, start up teams, and business plans crowding the web space start ups have to find a source of financing to execute their projects and keep the lights on. It is clear that some business plans just need seed capital before they hit the milestones necessary to attract angels and venture capital. In our experience at VCEL, Inc we have found that there are a few options for startup2.0's to leverage web2.0 itself to provide themselves with some necessary funding.
One option is to provide project management and outsourcing consulting services to clients found via the following services:

elance.com, odesk.com, getacoder.com, rentacoder.com,

This method has one contingency: that your start up has engineering resources. Ideally this would be done in house by the entrepreneurs themselves, however if the founders are not coders then a relationship with overseas development houses can serve as well. In VCELs case we have established and experimented with a few relationships and partners such as:

Krendls,WMConsulting,Unteh,Quarta Inc, Deepsky, etc

Since all of these engineering groups are in Russia or Ukraine it also helps speaking the native language a little bit. Being able to pay a visit to their offices in Russia or Ukraine is an even better way to strengthen that relationship.

Recently, I have been entertaining the possibility of another approach to driving more funds either via raising investment or selling some form of the start ups technology assets: These are commonly known as "Ebay Exits". I encountered the following services that may make this more posisble then to bet on selling your website on ebay or craigslist. Although companies like mojungle.com and others have taken this exit.

web20forsale, webauction, midascode
,techquilashots, ventureboard

Overall, these services, blogs, anf forums are a great idea, possibly the beginning of a new channel to monetizing startup2.0's. The ability to tap into online marketplaces for exits will clearly drive more innovation and entrepreneurship. Don't you think so ?

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