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Net start-ups face odd problem: more VC cash than they need

One thing common to new Internet companies in Silicon Valley these days is that they don’t need a lot of money to get off the ground.

But venture capitalists are eagerly stuffing cash anyway into the hands of some Internet entrepreneurs who have been getting buzz — and who are willing to take it.

That has put some start-ups in a tricky position. Many Internet entrepreneurs don’t need the cash, because they’re building products cheaply — using open Web technologies, often with two or three developers. So in return, they’re demanding that VCs have a lot more to offer than just cash.

Take Marc Andreessen, the co-founder of Netscape, the Internet browser that helped usher in a new Internet era in the mid-1990s.

Andreessen is now apparently sinking much of his time in Ning, a new Palo Alto start-up. Ning last week launched its product, a company that offers easy tools for people to build more sophisticated Web sites themselves.

By Matt Marshall

Mercury News

Full Story: http://www.mercurynews.com/mld/mercurynews/business/financial_markets/12901801.htm

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