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Venture Capital in Open Source

Posted by ScuttleMonkey on from the throwing-money-at-open-source-can't-hurt dept.

conq writes "BusinessWeek has an interesting article on the recent interest of Venture Capitalists in Open Source. Also, a look at some of the latest companies they are supporting. According to the article, the first of three main criteria VCs look at in choosing an open source company is 'community. There has to be a huge amount of interest in it. [MySQL, Zend, and TrollTech] were already incredibly popular [when we invested]. The community is your marketing and evangelism arm. They're going to contribute and make sure this piece of software truly becomes mainstream.'"

2 of 68 comments (clear)

  1. What's the revenue model? by LeonGeeste · · Score: 5, Interesting

    Um, the article (I'm sorry, TFA) doesn't say anything about the, er, REVENUE MODEL that these "businesses" use (in fact, it specifically says that's big barrier, and only hints about the models in one line), and, uh, that's kind of important to consider when invensting venture capital. Remember the dot-com boom/bust, anyone? Enron? Didn't that teach ANYONE the merits of, you know, understanding how the businesses intends to make money before pouring putting your own funds into it?

    I had a great idea for a open source project that could use a lot of funding (it relates to machine translation and is something people would pay a lot of money for), and I read the article (TFA) hoping to find ideas for revenue models for open source that I could then use to promote when seeking VC. No, I was unfortunately not successful. Maybe next time Business Week can remember to include the single most important part of the story?

    --
    Rank my idea: http://www.sinceslicedbread.com/node/531
  2. Asterisk is a no-brainer by Toe,+The · · Score: 5, Interesting
    I can't wait until VC discovers Asterisk (and Digium, the company behind the project).

    It's a no-brainer, in terms of market and community. And it's a classic open source project, in that it ties into everything, does everything, and is used by everyone.

    I'll be installing next year. The more capital behind this project, the better.

    And hopefully some of that capital will go to developing Mac drivers for the PCI cards. :)