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July 23, 2006

Why would a VC fund a blogger?

There is a nice debate at Fred Wilson's blog on the logic behind VCs funding journalists who operate popular blogs like Om Malik and Rafat Ali. Wilson says he knows of several more similar deals that are going to be announced soon. "I suspect its because Om, Rafat, and the others who are raising VC money intend to turn their blogs into media companies, doing conferences, and developing value added services on top of or in compliment to their blogs."

"But the irony is that these bloggers all intend to use the capital to diversify away from blogs into traditional media company revenue streams like conferences and research," comments Will Smith in response. "What this says to me is not that blogs are standalone revenue-generators. Rather, blogs seem to be a way for their proprietors to build credibility, experience, scoop flow, contacts, and audience that can then be parlayed into a more traditional media company. So blogs may be a way to bootstrap an upstart media company, but they are not an end in and of themselves."

The conversation also discusses what kind of VCs can afford to do such sub-$1 million "seed like" deals.

Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.