EntrepreneursVenture Capital

A note of optimism in these hard times

By April 4, 2008 6 Comments

Mat Atkinson of ProofHQ left the following comment on my post yesterday about the impact of the credit crunch on venture capital:

I think that a recession is a chance for web-based businesses to thrive.-

For consumer oriented apps with an add revenue model CPA and CPC advertising revenue will hold up best.

For business oriented apps with a SaaS subscription model, the pay-as-you-go, nothing upfront, rapid deployment, rapid ROI model has huge appeal to businesses needing to tighten their belts.

If a company has bootstrapped (like we have done at ProofHQ.com) then a recession could be a great opportunity.

I think Mat is right that SaaS and CPA/CPC based businesses will hold up best, although depending on how deep the recession turns out to be it will affect us all to some extent.

His last point is a great one though – companies that come through the current period strongly will have a great chance to make it really big when things pick up.