Tech Industry

Dell caters to dot-coms with expanded leasing plan

The company expands a program that leases computers to Internet start-ups and companies looking to take their businesses onto the Internet, similar to a program begun by Gateway last week.

Who wants to lend capital to Internet businesses these days? Apparently, lots of computer makers do.

Dell Computer said today it has expanded a program that leases computers to Internet start-ups and companies looking to take their businesses onto the Internet. The move follows a similar program unveiled by Gateway last week.

In both cases the computer makers are touting the fact that e-businesses can preserve their venture capital by leasing computer equipment. The idea is that today's start-up might be tomorrow's Amazon.com.

"As they get larger we like to stay part of that business," said David Clifton, marketing director of Dell's small-business group. "It's great."

Dell has programs that target pre-IPO companies as well as companies that have gone public. In the program that targets newer companies, Dell requires businesses to have the backing of at least one venture capital firm and works only with companies that plan to spend $400,000 or more on tech gear in the next 12 months.

Both Dell and Gateway scrutinize the business plans, examine the management team, and sometimes take an equity stake in the companies before leasing equipment. For Gateway, an equity stake is sometimes a condition of the lease approval, while Dell said it can affect how much financing a company gets.

Neither company seems worried about the current shakeout affecting dot-coms.

"There's always going to be some amount of risk," Clifton said.

The venture leasing is part of the company's Dell E Works program for Internet commerce and infrastructure companies as well as traditional companies that want to streamline their businesses by using the Internet.

That effort began in February with Web hosting for small businesses and has been expanded to offer services such as online accounting and marketing. Dell also plans to expand the services it offers to larger companies.