Early Stage Investing in Startups

Redeye VC writes an interesting post about VCs and their significant return requirements. The post talks about Charles River Ventures’ decision to invest at the seed stage.

It begs the question, why aren’t more companies doing this? Sure, some companies already do, such as Intel and Lucent, but I haven’t seen a ton of this in the web 2.0 space.

It’s for this reason that I think Charles River is onto something that more and more venture capital firms will explore. As good investments become harder to come by, the need to go down the food chain is becoming more and more important. Yes, the long tail principle even applies to venture investing.

So What? Will this be the beginning of a trend or an unconventional move in what some are calling bubble 2.0 remains to be seen. Regardless, if I’m a startup, I’m happy to hear that more and more channels are coming on line to help fund new businesses.

Tags: Venture Capital, VC, investment, entrepreneurship, seed funding

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