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Investors Resume Funding Online Startups

Investors are making a cautious return to online startups.

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This story appears in the August 2006 issue of Entrepreneur. Subscribe »

If you missed the first internet wave, it may not be too late. Working with new business models and boosted by investors' growing appetites for dotcom startups, a second swell of online enterprises is emerging.

Venture capitalist Sam Jadallah of Mohr Davidow Ventures in Menlo Park, California, says that since media giant News Corp. paid $580 million to buy fast-growing online community-builder MySpace.com in 2005, entrepreneurs have been working feverishly on internet business plans they hope will appeal to consumers, investors and potential buyers.

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