I personally disagree. If, for instance, you are renting out competitively priced infrastructure, you aren't going to get started with $20K, unless you are willing to spend some number of years consulting and rolling the money in to servers (which is what I did; so it /is/ possible; I'm just saying, it's pretty goddamn difficult to get a low-margin, competing on price infrastructure company off the ground with $20K. And really, it's going to be really difficult to get investor interest in such a venture until you have more traction than you can get with that kind of scratch.)

If you are going head to head with something like ec2, $170K is probably enough to get you started, I'd think, if you are willing to live cheaply and don't screw up too much. If you count all the contracting money I put in, eh, that's probably in the ballpark, and I am to the point where I can reasonably provide compute units at a competitive price, though my software lags by quite a lot. I mean, you need /some/ scale, though you don't really need as much scale as they say.

Of course, if you are a high-margin infrastructure company, and your margins are high enough to re-sell ec2 with a value add software stack, $20K very well might be enough. I'm just saying, $20K doesn't get a lot of hardware