Raising Money Amid a Credit Crunch and Google Starts a VC

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Could Google fund your next venture? Google already controls your website traffic, your email, and, maybe, your soul. Why shouldn't it own a piece of your company? According to the New York Times, Google is creating a venture capital arm, called Google Ventures, which is anticipated to invest up to $100 million over the next year. The search giant hopes to fund high-potential startups in areas like the Internet, clean technology and life sciences, which should be good news amid a tough fundraising climate. (Google's blog has the news as well.)

The SEC cracks down on peer-to-peer lending. Remember Prosper? The site, which Inc. first wrote about in 2006, had built a nice little business doing small person to person loans, spawning a handful of other peer-to-peer lenders. Then, as we reported in January, the SEC got involved. The agency slapped a cease-and-desist order on Prosper, which up until then had enabled 25,000 loans totaling around $150 million. Until Prosper registers with the SEC, it's prohibited from facilitating any new loans. Today, the Big Money, asks why the SEC is messing with little lending startups--amid a credit crunch no less--instead of going after Ponzi schemes. "Why, in the depths of the Great Recession, would the federal government be stepping on the necks of John Dough and Joe Sixpack who just want to float a little cash to help each other get through the tough times?" the article asks.

Boom times for microlenders. Microlending tends to be associated with developing countries, but with bank loans increasingly hard to come by, it's getting more popular in the U.S. The Wall Street Journal says that small businesses and entrepreneurs are turning to organizations that loan between $500 and $35,000. Microlenders generally charge higher interest rates, but, according to the article, "They are more lenient in screening prospective clients, however, and more willing to tailor repayment periods to the specific needs of a business. And it is that flexibility that is attracting more small-business borrowers these days."

The return of Joe the Plumber? According to the AP, the debate over how many small businesses will be hit by the administration's proposed tax increases is heating back up, even though no one has made any progress in either direction. Obama says few small businesses would be affected; the NFIB says otherwise. For continuing coverage, check out Robb Mandelbaum's blog.

Looking to make your mark as a video game entrepreneur? Bizbox thinks the future of gaming is on your iPhone. What does that mean for entrepreneurs? The industry is being pushed towards a blockbuster model, which could put the squeeze on small companies. But at the same time, major companies like EA and Sony can't raise prices too much because of the proliferation of cheap choices for consumer, which are often created by unknown start-ups. The sector is expanding, and it's a more comfortable place for entrepreneurs than big businesses.

Spam is out of control. Spam now accounts for 94 percent of all e-mail, according to a New York Times blog post. And that could get even worse. The post says there's reason to believe spammers are constructing more decentralized "spamming botnets" that would make malicious e-mails even harder to crack down on. Check out Inc.'s guide for taming your spam here.

$74 million for virtual goods. Seriously. According to Techcrunch, a Finnish company called Habbo, which operates a virtual world for teens, made $74 million in 2008, mostly through sales of virtual gifts. The article cautions that Habbo is one of the few companies that has made the virtual stuff business model work.

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Last updated: Mar 31, 2009




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