Tech's Best Young Entrepreneurs

Matt Sanchez, 26

Company: VideoEgg

Funding: About $27 million from August Capital, First Round Capital, Maveron, WPP, and Focus Ventures

Co-founder and CEO Sanchez originally launched VideoEgg in 2005 as a Web-based video player capable of playing clips in a variety of formats and embedding them in Web sites. But it has evolved into an ad network that displays ads within the widget applications and services that have taken off on social networking sites. Facebook widget makers earned $1.5 million in revenue from ads placed in their applications by VideoEgg's network over the course of five months last year. VideoEgg has also pioneered new advertising techniques. These include translucent ads laid over Web videos, and pricing models such as pay-per-engagement, which charges marketers only when users click, roll over, or otherwise interact with an ad.

Advice: "Downturns are often the best cycles for entrepreneurs looking to bring a new approach to market. Existing businesses look for efficiencies in tough times and create opportunities for disruptive models and innovative practices. At the earliest stage, your job is to find a fit in the market for your product, and you are growing revenue from a very small base. Even in a contracting market there should be a ton of room to grow."