2011 is setting in motion the beginning of a new Internet tech boom—quite different than what was witnessed in the late-90s. Whereas the previous boom focused on hardware and search engines, this boom centers on social media and mobile devices. Whereas the previous boom occurred in the San Francisco Bay area in Silicon Valley, this one has seen new players pop-up in Manhattan in an area referred to as Silicon Alley. What is already defining this boom from the last is the lack of companies rushing to go public. In fact, companies like Facebook are acting hostile towards Wall Street, and want to retain greater control of their company and avoid some of the market volatility from going public.

For Facebook and Twitter, the need to publicly raise money, just isn’t as pertinent as it once was. With Goldman Sachs recently investing $500 million into Facebook, for instance, there isn’t a rush for a Facebook IPO. But with that said, some see Goldman Sachs’ investment as a move to get on the inside track of underwriting Facebook’s IPO in a few years. These rumors are surfacing as Facebook is encroaching upon the 500 investor mark, which requires it to register with the SEC, making company information publicly available. The logic behind these rumors is that if they have to make information public, they might as well have the company go public.

For these tech companies, remaining private allows their founders to instill and hold on to the values and ideas that made their companies originally take-off. And with investors looking feverishly for great ideas and companies to park their money—given lingering post-recession volatility—what is going to motivate Facebook and Mark Zuckerberg to give up control and take on greater market instability?

Tapping into venture capitalists and angel investors, rather than raising money by going public, seems to signal a trend by start-ups in the post-recession economy. But even if other companies like Twitter, Foursquare, and Groupon flirt with the idea of going public, if Google’s path reflects anything, the general resolve seems to be wait an extended period of time—as what was witnessed with Google who went public very late in the game. And for Google, as seen with Facebook, this wait created a backlog of investors looking to own a stake in their company.

With this surge in private equity investing, as people become more cautious of the stock market, sites like P2P Financial are becoming essential, helping accredited investors invest privately in budding companies and entrepreneurs. As most individuals don’t have the luxury or capital to have their money managed by investment companies—aggressively pursuing the latest and hottest company and trend—connecting with privately held companies through P2P is more and more appearing to be an essential avenue to look to invest.

For those interested in investing in the next wave of Internet companies, privately investing and reaching out to them could be one of the most effective ways to be part of this market. And as such, P2P is a great avenue in which to enter this sector early in a business’ lifecycle.

With the advent of Facebook and Twitter, social media has become a permanent aspect for most of us in our daily lives. Recently, Facebook surpassed the 500 million member mark, with the company now valued at $50 billion and earning $1 billion annually in revenue. Though smaller, Twitter, with 200 million users, is valued at $1 billion and with revenue of $150 million. Given these figures, it is of little surprise that so many angel investors are seeking to find the next great social media start-up. But before you look at privately investing in this ballooning sector, there are things you should understand about their business model and differentiating features.

The distinguishing feature of social media that differentiates it from the dot.com Internet boom of the late 1990s is the way people interact and connect with each other online. Whereas people previously made money off the Internet through the ability to search for people, companies, and sell things, social media or what some call “Web 2.0,” allows Internet users to create and publish anything they want to share about themselves. While this in itself provides zero revenue, the advertising model that it is premised on has become a lucrative business. Google for example, made $6.77 billion in the first quarter of 2010, which is made almost exclusively off its search engine capabilities that power its advertising model (because in the end, Google is just a very large advertising company).

More recently however, smartphones, have served as a platform for the selling of “apps.” Apps are third-party software programs that perform a variety of different functions (ie. suggest restaurants, turn on your car, allow you to purchase items, play games). Given the distribution system of cellphones, apps have become a relatively inexpensive product with a huge and accessible market reach.

Thus, for some, the revenue from social media is the software program itself. For others, it is the advertising revenue generated by connecting and tracking others. More recently, the emergence of ”geolocation” on cellphones has allowed us to pinpoint the specific location of users of specific apps. This in turn has resulted in highly specified targeted advertisements. These affordable advertisements have allowed both individuals and small companies and large companies to adequately target their customer base.

In general, privately investing in a social media company can mean a few different things depending on the source of revenue. With competing apps available for download, investing in what you see as a successful company has become a harder decision. While due diligence is needed when picking said company, the other thing to remember is that most companies are not going to turn out to be the next Facebook or Google. However, because of the market reach of the Internet and ability to deliver targeted advertisements, finding a good small-to-mid cap company can be an excellent pay-off. In the end, the hardest part of investing in social media is not the business model itself, but finding a company you believe in, with the pay-offs you expect from your investment.