Making an initial public offering (IPO) is one of the few financing options dot-com companies have. But, an Internet IPO is a difficult ballgame, riddled with uncertainties. Fundamentally speaking, most dot-com companies do not have strong business models and sustainable revenue models. Technically speaking, dot-com stocks are on a global meltdown. These factors make the success of an Internet IPO uncertain.

Absence of clear payment gateways, limited electronic fund transfer facilities, low penetration of credit cards and unresolved issues relating to logistics and delivery are hampering the growth of e-commerce. That is why most Internet startups will find the going tough. When the going gets tough, it is very difficult to find easy financing avenues.

Internet companies require not just start-up finance. They also need funds for financing their working capital needs. Their accent on "sticky eyeballs" makes them resort to intensive promotion and advertising. This results in heavy promotional costs. How do Internet companies propose to foot these bills?

Financial institutions are not going to fund dot-come ventures. Banks are sure to shy away from financing them. Debt is certainly out, thanks to the fact that Internet companies have neither tangible assets to offer as security nor a steady revenue stream to service the debt.

In such a depressing scenario, the only beacon that holds out hope is the venture capitalist. Assuming risks in their entirety and concerned about the progress of dot-com ventures, these venture capitalists play the role of a benevolent godfather. Quite often, they double up as financial advisors, corporate strategists, sounding boards, marketing info-providers, and management recruiters.