Photo courtesy of iStockphoto, Jan Rysavy


A recent post by blogger and venture journalist Donna Bogatin raises the question again about the need for big venture capital in a Web 2.0 startup world.

The implications are similar to those raised in a recent post by Taylor Davidson on his blog though Taylor takes the other side of the argument to some extent. (View our extended discussion of the topic here.)

The question? How much big outside investment is really needed in a world where technology is pushing the cost of especially Internet startups but also to some extent service and even retail startups lower and lower?

Take my own admittedly lean startup, for example. With added outside investment, I could:
• Add additional bloggers and additional bandwidth/capacity if necessary to instantly expand the existing PostRanger.com by creating sub-blogs in each of the existing categories already linked to from the main site
• Hire an advertising firm or firms to help monetize the site immediately instead of experimenting with Google AdSense, BidVertiser, CrispAds et al to see what kind of revenue can be generated without additional staff first. (One idea I have is to sell premium links to blogs from posts within each existing category. Any takers?)
• Hire a software developer to create a specialized platform for the network adding more of the social media features I had originally envisioned that are so-far not really possible with the off-the-shelf TypePad platform I'm currently using.

Am I making a mistake to bootstrap? Would it be better to seek VC funding for a concept that has yet to generate any real revenue? Let's keep this discussion going. Add your two cents below.