Investors Look to Fund Capital-Light Businesses

Low startup costs and cheap customer acquisition make web-based startups an attractive investment.

By Tim Beyers | August 12, 2010

More and more, entrepreneurs are turning to the web to start new businesses because of low startup costs–often less than $1 million. Investors are helping drive the trend, in part because they have less money to invest. The average venture fund has shrunk from $166 million in 2007 to just over $120 million at the end of last year, according to data from the National Venture Capital Association and SVB Capital. Smaller funds tend to gravitate toward smaller funding rounds.

Read more…