LONDON (Reuters) - Venture-capital investments have been falling in a depressed economy but this is not necessarily stifling technology start-ups, as it becomes easier to get firms off the ground without outside investment, Microsoft says.

"With the advent of relatively cheap computing, relatively cheap bandwidth for communications, the cost of setting up a start-up has gone down," the head of Microsoft's emerging business team, Cliff Reeves, told Reuters.

"A lot of companies are making their start without investors," said Reeves, speaking as Microsoft announced this week it was partnering with HSBC bank and telecoms provider BT to expand its entrepreneur-support network.

Robert Hendershott, a professor of private equity and entrepreneurship at Santa Clara University, has also argued recently that venture capital is becoming less relevant for entrepreneurs starting Web companies.

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In a paper to be published in the next issue of the International Review of Entrepreneurship, he writes that many founders can now finance companies using just savings, money from family and friends or credit-card debt.

Investments in start-ups in the United States more than halved in the first quarter to $3 billion, according to the MoneyTree Report by the National Venture Capital Association and PricewaterhouseCoopers based on data from Thomson Reuters.

U.S. software VC investments dropped to $614 million from $1.38 billion a year earlier, telecom investments fell to $110 million from $436 million, and Internet investments fell to $556 million from $1.32 billion.

QUALITY INVESTMENTS

Reeves argues, however, that serious investors are not going away: "The people who have solid investment portfolios are staying in the market, so while there's maybe a little reduction in investment, the quality of the investments remains high."

He adds: "Valuations have come down a little, so when a company comes to take an investment they're going to give up a little more equity, which makes the investment more attractive, so it's gotten better for good companies and good investors."

Microsoft has no VC fund of its own, but it launched an initiative last November with dozens of partners to support entrepreneurs with resources in kind and expertise. HSBC is its biggest financial partner.

Microsoft, for example, provides free software development tools and a platform for start-ups to run the applications they create with those tools for three years, at the end of which they pay a fee of $100.

Reeves acknowledges that firms are extremely unlikely to switch to other software after three years of building their business around Microsoft -- but says the software giant's motivation is to help ensure future generations of innovation.

HSBC says the partnership will help it differentiate itself from other banks in appealing to technology start-ups, which account for 8 percent of all the start-ups to which it lends.

"This program gives us something unique to target a sector that we're very, very interested in," HSBC's global head of small-business marketing, Rupert Bedell, told Reuters. "Tech start-ups have a higher prosper ratio than most."

HSBC recently created a new $5 billion fund for small businesses, on top of its normal lending, of which 1 billion pounds ($1.5 billion) is earmarked for Britain.

(Editing by Rupert Winchester)