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[Posted on September 17, 2007 - 1:10 PM]
The latest crop of data from Dow Jones VentureOne and Ernst & Young looks at the funding of Web 2.0 companies globally and determines that investment in U.S. startups far exceeds that of young companies based in other countries, but it is slowing. Companies in the U.S. raised $357 million in the first half of the year compared with $464 million raised worldwide. But U.S. growth slowed form the year before while Web 2.0 fundings are on the rise in many other areas of the world. New England startups surpassed young companies in the San Francisco Bay Area when it came to raising funds for the first time since the Web 2.0 label was applied to Internet businesses.

Is it the upcoming Apocalypse for Web 2.0 entrepreneurs, or is it perhaps the first sign of some sense as venture firms remember how much they put into the dot-com consumer companies of the late '90s and how much they subsequently lost? With plenty of "me-too" businesses popping up with less than $3 million in funding, perhaps the Web 2.0 market has reached a saturation point out West and in the U.S. overall. If so, that's not necessarily a bad thing. - Stacey Higginbotham



See Sept. 17 story in the San Francisco Chronicle


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