The statistics released today by VentureOne showing that Web 2.0 startups have raised $455 million in venture capital through the first three quarters of 2006 is good news for the Web 2.0 conference, which begins in San Francisco today. That's because there are plenty of startups flush with cash to pay the $10,000 presenting fee and the $3500 required for an individual to attend the conference. Last year, Web 2.0 startups raised a total of $254 million.
While the investment volumes may be good for the Web 2.0 conference organizers, the effect on venture capitalists is not clear. Only 4 of the 79 rounds of funding completed this year went into profitable companies.
On the plus side, it should be noted that 67% of the capital went into later stage companies raising second, third or later stage rounds. That's a sign that investors realize that the time for landgrabbing market segments of Web 2.0 has past. So, newly formed companies must bring some technological or business model innovation to the market in order to have a chance at success. For that reason, Web 2.0 startups have raised $151 million over 46 first and seed rounds of funding in 2006 so far.
For more on the Web 2.0 Summit, see:
Ian Davis
San Francisco Chronicle
Flickr
Tags: web2, web20summit, web20summit06, vc, venture+capital
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