Open Source and Venture Capital

O’Reilly Radar comments on ZDNet UK’s Is Open Source A Bubble Ready To Burst? article:

I’ve always viewed VC funding of open source as being like telco investment in infrastructure: even if the telco can’t figure out how to make it work, the copper’s still in the ground, the fibre’s still laid to the home, the source is still available for people to continue building upon. What’s insane is promoting VC funding of closed source companies: if they go south, their software is either sold at bargain basement prices to a competitor (net improvement to world: bugger all) or ends up locked in a trunk in an investment company unlikely to ever see life.

While Venture Capitalists are getting hesitant to fund Open Source business, software entrepreneurs are also finding that they need less money to get things done. This and the dwindling exit market make VCs feel the squeeze.

It is interesting to follow the venture market now that we’re wondering how to get the Digital Business Ecosystem applications out to the market more effectively. The market has definitely changed since we started in 2001.

Via Boing Boing and Signal vs. Noise.

Updated 2005-11-10: Apparently Open Source investing is really picking up. Via Bob Sutor.