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.