Negotiating with Venture-Backed Companies

Look for consumer Internet, digital media and cloud computing to see a lot of “froth” from the venture community this year. That’s the term used to describe over-investment, which has analysts worried about the possibility of another tech bubble. Fifty one percent of the National Venture Capital Association’s VC members predict an up year (PDF) for U.S. investments in 2011, with IT showing the biggest increase.

The possible “bubble 2.0” will create jobs in the short-term, and could even be a bonanza for some workers. But if we’ve learned anything from the past, it’s that you should be cautious about accepting stock options or vague promises from start-ups. Otherwise you may end up with nothing to show for your work.

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