ABSTRACT
Internet-related businesses are a phenomenon of the last ten years. At one level e-commerce businesses require only limited start-up capital. Developing the idea and a website is not prohibitively expensive; the problem – and the expense – lies in establishing the procurement and distribution systems. The other key issue is making sure web users visit the site of the business, a problem which intensifies all the time as more and more sites are put up. However venture capitalists have at times been investing in these businesses, often accepting risks and uncertainty not normally associated with venture capitalists. A number of professional firms (consultants, lawyers and public relations specialists) have opted to waive their fees in exchange for equity in these new ventures. The reason – things have been moving very quickly and people were afraid of being left behind in the race! But some interesting and sometimes expensive lessons have had to be learned.
