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HindustanTimes Mon,24 Nov 2014

Online veterans unveil start-up investmt fund

Kenneth Li, Reuters  New York, November 15, 2007
First Published: 13:07 IST(15/11/2007) | Last Updated: 20:07 IST(15/11/2007)

Veteran Internet executives from AOL and IAC/InterActiveCorp plan to unveil on Thursday a new firm to coach early stage entrepreneurs in digital markets and invest in their start-up Internet and mobile companies.

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LaunchBox Digital - founded by Julius Genachowski, former chief of business operations at IAC; Sean Greene, founder of The Away Network; and former AOL Chief Technology Officer John McKinley - will offer start-ups up to $1 million in financing.

"There's a capital gap emerging as venture funds get larger and put more money to work per deal, but as cost to start companies go down, it gets harder for early stage companies to figure out where to go to get early stage funding," Genachowski said in a phone interview.

Some venture capital funds now invest no less than $5 million to $10 million in individual companies, he said. Funds now prefer to bet on already-proven winners in an increasingly competitive market for Internet start-ups.

Financing of so-called Web 2.0 start-ups more than doubled worldwide in 2006 to $844.4 million, according to research firm Dow Jones/VentureOne, and data for the first half showed such investments up 7.5 percent on the first half of 2006.

Web 2.0 is a catchphrase for a new generation of Internet services that run on interactive software and typically rely on content generated by users to attract more visitors to sites.

Next year, Washington DC-based LaunchBox plans to hold a contest to select six to 10 entrepreneurs to receive funding of $25,000 to $30,000 and mentoring over a 12-week period.

LaunchBox's founders said Silicon Valley venture capital competitions have ignited interest in launching start-ups. Google Inc and backers of Facebook offer funding for programmers keen to build software for their platforms.

Winners of the LaunchBox08 contest will tap expertise of the founders and advisers such as a former chief of News Corp's Fox Interactive Media, Ross Levinsohn, former AOL CEO Jonathan Miller, former US Federal Communications Commission Chairman Reed Hundt, and Advertising.com's co-founder.

AOL is a unit of Time Warner Inc.


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