Take the Money and Run (reliably)
Here comes the money. Venture capitalists are taking a long hard look at Linux and open source software.
Saturday, January 15th, 2000
Angel investors and venture capitalists are swarming around the open source community these days. Red Hat’s IPO created an initial buzz, but since Linux hardware vendor Cobalt Networks followed up with the fourth-most-successful IPO in history, the floodgates have been opened. Investors are now courting both upstarts and established players in hopes of staking a claim in the burgeoning open source market.
The level of interest is “remarkable,” according to Eric Sink, the CEO of SourceGear, a company that is repositioning itself as a provider of Linux tools. Sink’s company, best known as the creator of the open source word processor AbiWord, is in the midst of a round of venture funding, and he’s felt the change since his company first announced AbiWord in August of 1998. “We’ve had situations,” said Sink, “where a money manager will call us and say, ‘Hey, I manage the money for so-and-so, they’re ultra-wealthy and retired, and they called and said I want my money in a Linux play because I saw what happened to Red Hat.’” SourceGear has been courted by individual investors offering several million dollars and is in talks with traditional venture-capital firms as well. “It’s amazing how Red Hat’s IPO increased the visibility of Linux,” Sink said. “Even retired people in Florida want to put their money in it.”
Fishing for the Big One
