Evergreen evidently believes in Internet: the fund has decided to focus its pre-seed plan on Internet and new media startups.

Its program aims at entrepreneurs who still need to test and confirm a technological concept, or its underlying business plan.

At this early stage of development, each startup it chooses is expected to receive about $250,000-$300,000.

The fund identifies entrepreneurs and technological innovations, and invests small amounts that can help Internet companies reach the first round of investment.

"Evergreen's pre-seed plan already exists, but after seeing more companies from the media and Internet sectors, we decided to dedicate it to Internet and media," said Evergreen managing partner Erez Shachar.

Evergreen is following the recent trend of Israeli venture capital funds' investing in Internet companies. The Jerusalem-based JVP fund has announced it will change its focus to media and content technologies; Gemini and Lightspeed have established an Internet laboratory that has made two investments; Jerusalem Capital has established an investment fund dedicated to Internet and technology-enabled services companies; and Benchmark and Giza have also followed the trend.

"The concept is simple," Shachar said. "Unlike information technology or semiconductor companies, Internet companies can produce a complete product, ready for real interaction with clients, with the knowledge that there's a demand for their product of less than $1 million. We don't pretend to know which concept will be accepted on the Internet and which will not. We say we're willing to test it with a small investment of a quarter or half a million dollars. The beautiful thing about the Internet is that you can analyze exactly what does and doesn't work."

Shachar added that limited investments in Internet companies and new media are one of the lessons learned from the Internet bubble. "There's no reason to invest the same amount in Internet companies as in other technologies. It is superfluous."