One of the biggest red flags I see in many Internet-related business plans today is advertising as the initial revenue stream, or a key part of it. If challenged, the founder usually cites the Facebook business model (free service to users, revenue from ads), but forgets that Facebook has had several hundred million in funding, and has been profitable only in the last two years.
The most challenging time is your first couple of years, when your site is unknown, and your page-views are low. Until you get a million page-views per month, your revenue will be negligible, and advertisers won’t be interested in your site. Don’t count on that to fund your startup.
To read the full, original article click on this link: Startup Professionals Musings: Funding a Startup from Advertising is a Vain Dream
Author: Martin Zwilling
