5 Cool Start-Ups to Keep an Eye On

July 9, 2010 — -- Every company starts small. Facebook began as a Harvard networking site, Starbucks as a small Seattle coffee shop and Microsoft was famously started in a garage by a college dropout.

It's easy to explain in retrospect what made these companies succeed. But looking in real time at a cluttered landscape of fiercely competing small businesses, it's difficult to pinpoint potential winners. ABCNews.com asked savvy venture capitalists for their predictions for the big companies of the future. Here are five of their top choices.

ZoomSystems

What It Is: "Zoom does for retail what ATMs did for banking," says Gower Smith, founder and CEO of ZoomSystems. The company's Zoom Shops are automated shopping kiosks that sell customers everything from iPods at airports to acne cream at Macy's. The San Francisco based company is planning to expand into apparel next.

Why We Need It: Zoom Shops combine the efficiency and information wealth of online shopping with the instant gratification of regular shopping. It allows companies to set up shops in confined areas – airports, casinos, college campuses -- where they might not otherwise have access.

Bare Facts: The first Zoom Shop launched in 2005, and the company, with 125 employees, now has 1,000 kiosks scattered around the world. Macy's has outsourced its entire electronics department to Zoom Shops.

Groupon

What It Is: A website where consumers can buy discount coupons for services in their neighborhood. For $39, for example, you can buy a month-long membership to your local gym that would ordinarily cost $135.

Why We Need It: People like to save money. "Groupon is a very simple but very valuable service," says Roger Lee, general partner at Battery Ventures, which funded the Chicago-based start-up. He points out that Americans spend 80 percent of their income within 10 miles of their home, and they are apt to jump on an opportunity that gives them a targeted chance to save.

Bare Facts: Groupon was founded in 2008 and now has 300 employees and thousands of members in the U.S., Canada and Europe.