This past week I was able to talk a partner of an oil and gas VC that specializes in small scale (less than 10M) projects. One of the things I asked her was if the 'small-fry' oil and gas industry was being smothered by the giants of Exxon, BP, and Shell much as some people claim is being done by Microsoft, Google, and Yahoo. She replied that the big three are only able to pursue and develop the projects which show a high margin due to their high operating costs thereby allowing small ventures to flourish in projects that aren't 'profitable enough'.

Certainly this argument has also been made for the internet market too, but the oil and gas market is heavily capital dependent with large 'retooling' costs whereas the internet industry is driven largely by a smart labor force (ie: a more agile industry). So is it a possibility that small time internet ventures are more vulnerable to attack than the equivalent oil and gas company (and other industries for that matter)?

Does anyone have experiences going to VCs for funding that dont specialize in internet technology startups? I am particularily interested if say an oil/gas VC would be willing to negotiate sweeter terms than many of the "cut-throat" tech VCs would...

I'm just speculating(as I have no VC experience at all) but would'nt the oil/gas VC be less tech savvy than your tech VCs? Another thing to consider is they(oil/gas VC) will have little or no knowledge about the Internet industry which makes it significantly more difficult to convince them the possible implications and benefits of your start up.

Why would a VC firm specializing in oil/energy invest in an internet startup? VCs generally have specific areas they invest in.. if they don't "Specialize" in internet, they won't invest in you.

My point exactly