There is good news for internet businesses looking for funding in the current economic climate. Balderton Capital - funders of online favourites Bebo and LOVEFiLM - last week announced tech and media funds totalling £282m.  This comes just weeks after Facebook and RealNetworks investors Accel Partners also released funds worth $1bn, signalling venture capitals confidence in the strength of internet companies to survive the credit crunch.

Contrary to concerns, the economic crisis signifies an increase in internet innovation, as businesses look to reduce costs for both the provider and the consumer. As disposable cash plummets and the need to reduce everyday outgoings continues, people will increasingly look to money saving solutions that still allow them to enjoy their free time.  Such online solutions as Lovefilm are expected to flourish through the downturn, as people move towards the price and convenience of to the door DVD delivery.

Although the downturn presents hard times for venture capitalists, the majority of the fund has come directly from the firms own dealings - including the $1bn sale of MySQL to Sun Microsystems and that of social networking site, Bebo, to AOL for $850m - providing the company with a strong funding position.

Now, more so than any other time, the market is acting as a filter - allowing success for sound business solutions and failure of the weak.  Not only does it present the perfect playing field for internet enterprise that harnesses the potential provided by a recession, but through the provision of funding, Balderton has shown there is still venture capital available to sustain it.