Are Enterprise IT startups the next big deal for VCs?

Are Enterprise IT startups the next big deal for VCs?

Original post by  via ZDNet

The consumer web has a bright future, says Dave McClure (above).

Dave McClure, the highly successful Silicon Valley Angel/Micro VC investor, published a passionate post about the prosperous future for the consumer web, and criticized other investors for moving away from the sector.

Mr McClure writes:

Recent articles by the WSJ, Fred Wilson, & others are noting a shift in investor interest to enterprise and away from consumer. If true, this is a huge error… at least for entrepreneurs, angels, and smaller funds. There is no better time than the present to build cheap & scalable software-based businesses that make money.

He points out that the business opportunities are far from over because of the simple fact that the Internet continues to grow at a fast pace and still has plenty of room to grow. After all, there are massive economic regions around the world that have yet to come online with the full suite of connection, payment systems, and physical infrastructure for e-commerce that we have in the US and Europe.

Foremski’s Take:

I’m a big fan of Dave McClure and his work with his 500 Startups incubator and I agree with him that there are still a lot of very good business opportunities in the consumer web sector.

However, I’m also increasingly focused on the enterprise IT sector because it’s a very good market for startups that know what they are doing.

Startups in the enterprise IT sector don’t come from the same stables as Mr McClure’s 500 Startups, or Paul Graham’s Y Combinator. They aren’t filled with fresh graduates in their early 20s. The teams have experience and knowledge from having worked in the enterprise IT sector, and they know the pain points that corporations will pay to have solved.

The enterprise IT market is a $3 trillion global market. Corporations have money and large budgets. There’s still a lot of great enterprise businesses to be created.



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