Facebook announced their fbFund to at the TechCrunch40 conference earlier this week. The fund will provide between $25k-$250k to developers building applications on Facebook’s platform. This is very similar to Google Gadget Ventures, who launched earlier this year offering $10k-$100k.
Facebook are also rumored to be gearing up to provide hosting for developers as well.
The net effect of Google and Facebook is a wake up call for VCs. Accel and the Founders Fund are behind Facebook and the fbFund, so creating a mini-ecosystem to support an existing investment makes plenty of sense (it’s almost corporate venturing).
What’s really clear, though, is the real cost of bringing new companies to market- peanuts. Most entrepreneurs can scrape together $25k or beg, borrow or steal time/input/equipment to get to an equivalent of $50k.
As the price continues to drop will we see a shift to this new breed of corporate venture?