The New Rules of Raising Cash

Raising money for start-ups is relatively easy in Silicon Valley these days. But longtime entrepreneurs and venture capitalists say it is still nowhere near as simple as it was in 1999 and 2000, when a cash flood fueled the dot-com bubble.

Today, many entrepreneurs can quickly raise small amounts of money–several hundred thousand dollars or less–to get their ventures going, with plenty of individual “angel” investors and others willing to plunk down the cash.

But entrepreneurs and venture capitalists who were around more than a decade ago during the dot-com mania say fund-raising today requires meeting a higher bar–namely, a working product and some marketplace traction–than it did in the late 1990s. Then, a clever idea often was enough to attract investors.

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