April 19, 2005

Why VCs are taking a more measured approach to funding IT companies

Author: Jay Lyman

It is well known among tech startups and investors that the words "open" and "source" used together can gain positive attention from would-be angels looking to lift the next hot company, but there is also agreement that the scale of open source investment -- while strong and growing -- is not at the same fever pitch of the dot-coms.

Instead, explains Draper Fisher Jurvetson associate and SugarCRM board director Josh Stein, open source is more like the Internet boom, where regardless of a company's open source use, ventures must at least have a plan for how to deal with it.

"There's no question there is a lot of attention around the words 'open source,'" Stein said in an interview with NewsForge. "Is it to the point of a bubble? No. When I think of a bubble, I think of the late '90s when hundreds of thousands of companies were funded on the thinnest of premises. The number of open source projects getting funded is small."

Click Here!