We Don't Need Your Stinking Venture Capital

This morning's Wall Street Journal carries an interesting article from Rebecca Buckman, detailing how Internet start ups no longer rely on VC money like they used to in the 90's.

In yet another paradigm shift of the Internet Age, a combination of globalization and the commoditization of technology products has allowed an increasing number of Internet entrepeneurs to finance their own expansion.

As the article shows, when companies can outsource their programming costs to cheaper overseas labor, and when they can build their e-commerce sites with open source or off the shelf software, venture capital may be seen as increasingly "superfluous", as it's characterized by a quoted source in the piece.

Among other benefits to the founders, this approach allows them to grow their own valuation, which may often be higher to a potential suitor for the company, than it would have been on a pre-money basis to venture capitalists -- and without the oversight.

To be sure, many start-ups can use the discipline and marketplace experience that self-interested venture capitalists give, but, more and more, it seems that new Internet businesses will be able to approach VC's by choice and not out of necessity.

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