Startup Chatter by Donna Bogatin

Michael TechCrunch Arrington’s own financially backed and hyped Edgeio was “edged out” by the VC market, according to the LA Times. If the suppposed kingmaker of Silicon Valley startups can’t ensure his own equity financed ventures go golden, what are the chances for the legions of other non-annoited Web 2.0 “cool apps”? “This year will bring a wave of startup deaths as the credit crisis griping the financial markets makes investors cautious,” the LA T confidently announces.

Dow Jones Venture Source incredulously states: “This is the first time since the Internet bubble burst that Internet companies are facing serious challenges.” Hardly! All startups, Internet or otherwise, always have, and always will, “face serious challenges” regardless of the economic environment.Rather than lament a dearth of so-called “smart money,“ however, prospective entrepreneurs ought to seize the opportunity to escape the tyranny of a boom-bust venture capital mentality and bootstrap launch their own startups for independent, long term success.

Are “more Web startups on the rocks as investors appear to be warier about their bets,” as the LAT says? NOT the ones that have assured control of their own destinies from the get go, by developing non-capital intensive, but revenue generating, entrepreneurial endeavors, instead of counting on rapid, mass consumer traction of free consumer services.

Bootstrapped startups must leverage their scarce financial and human capital resources by building solid, revenue-focused business model-based enterprises. Venture capital backed entrepreneurs, on the other hand, are keenly aware of the need for their startup to deliver an “exit” to their investors, the sooner, the better. Cash may indeed be “scarcer for new technology firms,” but that also can be a very good thing. Quick, VC induced flips of non-revenue generating, non-sustainable, me-too,Web services, are not the stuff innovation economies are made of.