For startups without a warchest full of cash, times are about to get very tough. The latest to hit the deadpool is Eyespot, which announced its demise not with a press release, but with a Twitter from co-founder David Dudas stating simply:

Eyespot has shut down. Lots of great peeps available: engr, product mgmt, HR, content, bizdev, account mgmt. Let me know if u need anyone.

Eyespot raised $3.7 million way back in October, 2006 for its Web-based editor that makes it easier to create video mashups. But the Web video editor space soon got crowded, and there are only so many buyers. (Yahoo eventually acquired competitor JumpCut, for instance).

One tipster tells us that Eyespot was on the verge of selling itself, but the M&A deal fell through at the last minute. With no cash left, the company had to shut down and let all 22 of its employees go on Monday. The site, though, is still up. Anyone in San Diego looking to hire should contact David Dudas.

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If you’re already working with video on the web, an online editor is fast, easy and free. In theory, these services could bring video editing to people who would otherwise never engage in it. People already engaging in video editing can benefit from automatic software updates and the sharing made possible by online communities.

Here’s a look at each of the services, followed by a more in depth chart comparing features.

Cuts
“Simple and easy, when you need edits now”
Cuts is the new kid on the block and is all about remixing viral video. They don’t host content, but instead take videos from other sites (YouTube, Google, Myspace). With Cuts you can trim, loop, add preloaded sound effects, and insert captions to enhance the original. Editing is straightforward, consisting of changes to the sound, caption, and navigation levels for the video. Every edit can be re-cut, embedded, and emailed. In the future, Cuts will be expanding into simple editing for digital movies and TV shows. See also our early look at Cuts a few weeks ago.

Gotuit
“For slicing and dicing scenes”
Gotuit Scenemaker is for slicing out scenes from videos on other networks. After importing a video into the program via URL, you can select a start and end for one or more scenes on the video, title, tag, and email the scenes to friends. Unfortunately I couldn’t use it to slice up Gotuit content.

Eyespot
“Mashups with effects, transitions, and titles”
Eyespot is a solid editor that lets you mix together your own Motionbox content or scenes from their promotional media packs. It has a simple drag and drop interface that lets you manage a wide variety of effects and transitions for both the audio and video layers. Eyespot lets you add your own audio and mix in photos as well. While you can’t grab video from other networks, Eyespot’s white label editor is becoming available on more and more sites. The NBA is one of the most recent additions.

JumpCut
“When desktop software is too expensive”
Jumpcut is the most developed of the editors, allowing you to add a long list of effects, transitions, and captions to the videos. It also incorporates fine grained control of trimming and audio levels (uploaded background audio and voice). The complexity of the interface makes it great for detailed edits and mashups, but borders on being too heavy an application for the internet.

Photobucket
“Cutting edge tools”
Photobucket just released a new video editing product that leverages the most recent Adobe Flash tools. Unlike any of the other services, users can “mash up” video clips with audio files and photos, and add effects and transitions.

Motionbox
“For trimming and joining”
Motionbox is best known for deep tagging videos, but they also have an editor that is ideal for trimming your Motionbox content and joining the videos together.

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Eyespot offers drag and drop flash video editing direct to consumers and in partnership with companies like Blip.tv and Veoh. Competitor Jumpcut was acquired by Yahoo! last month. From cell phone ring tones to short video clips, online multimedia editing is clearly being bet on as the next step for the YouTube generation. Veoh has Michael Eisner and Overture’s last CEO Ted Meisel on its board. Blip.tv is the foundation of CNN’s new citizen video initiative. Partnerships like this make Eyespot look like VideoEgg, the company that provides browser based video capture to social networking sites from Bebo to Dogster. Liz Gannes reports that Eyespot also has partnerships with Lions Gate Entertainment, Current TV, Zomba/Jive, TVT, Columbia, Epic, Island Records, and Concord Records. What a list!

TechCrunch UK broke a funding story today as well. Online gaming company Mind Candy has announced that it’s raised $7 million from Accel Partners, Index Ventures and NewMedia Spark. Mind Candy has created a very popular game called Perplex City. The game incorporates real world events, websites, text messages, TV, print and a wide range of other media to create an immersive gaming experience, says TechCrunch UK’s Sam Sethi. For details on the company and its plans for expansion based on this funding, see Sethi’s coverage.

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New York City’s Blip.tv was selected to provide the underlying technology for CNN’s user generated video section, CNN Exchange, launched last month.

San Diego based Veoh provides 10 minute flash previews of long videos that can be downloaded in their full length through the company’s peer to peer desktop client. The company announced an undisclosed amount of funding from Shelter Capital Partners last week and has also received funds from Spark Catial, the Torante Company and Time Warner.

San Diego’s Eyespot allows drag and drop video editing online and positions its site as a community for remixing videos uploaded for that purpose. Competitor JumpCut offers similar functionality and has a small promotional partnership with Fox Atomic, an arm of Twentieth Century Fox. The company has received angel funding from Michael Robertson, the man behind MP3.com, Gizmo Project, Ajax Launch and countless other projects.

Eyespot currently limits file upload to 50 MB and it will be interesting to see if when these partnerships take form that limit is lifted for Blip and Veoh users. The prospect of contributors to CNN’s Exchange being able to quickly edit their submissions before submitting them is interesting, though CNN may be more interested in unedited footage.

This is a smart move that will help each of these companies offer a fundamentally compelling feature that the big sites simply hosting video do not.