JACOB INTERNET FUND INC.

                              Prospectus Supplement
                             dated January 23, 2001

     This supplement to the Jacob Internet Fund Inc.  Prospectus  dated December
     31, 2000, amends the Prospectus as follows.

     I.     The section  entitled "Risk/Return Bar Chart and Table" on page 2 of
     the Prospectus is deleted and replaced with the following:

PERFORMANCE BAR CHART AND TABLE

The performance  information  that follows gives some indication of the risks of
investing  in the Fund.  The bar chart shows the Fund's  performance  during the
last calendar  year,  and the table  compares the Fund's  average annual returns
with those of two broad measures of market  performance and an index of Internet
stocks.  PLEASE  NOTE THAT THE FUND'S PAST  PERFORMANCE  IS NOT  NECESSARILY  AN
INDICATION OF HOW THE FUND WILL PERFORM IN THE FUTURE.


    [BAR GRAPH APPEARS HERE DEPICTING A -79.11% CALENDAR YEAR RETURN.]


                    Best Quarter: -6.53% (1st Quarter, 2000)
                   Worst Quarter: -54.53% (4th Quarter, 2000)



                 AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000


                                                                                          ANNUALIZED SINCE
                                                                        ONE YEAR       INCEPTION ON 12/14/99
                                                                        --------       ---------------------
                                                                                           
        Jacob Internet Fund..........................................    -79.11%                -77.30%
        S&P 500 Index*...............................................     -9.10%                 -5.35%
        NASDAQ Composite Index*......................................    -39.18%                -31.15%
        Goldman Sachs Technology Industry Internet Index*............    -74.50%                -73.61%


       *   The  returns  of each  index  assume  the  reinvestment  of any stock
           dividends.  The  S&P  500  Index  is  an  unmanaged  index  generally
           representative  of the U.S.  stock  market for large cap stocks.  The
           NASDAQ Composite Index is an unmanaged index generally representative
           of  the  market  for  over-the-counter   stocks.  The  Goldman  Sachs
           Technology  Industry Internet Index is capitalization  weighted index
           of companies  (currently  34) selected as  representing  the Internet
           sector.  Investors  may not invest in an index and,  unlike the Fund,
           the  return  of an index  is not  reduced  by any  fees or  operating
           expenses.


     II.     The  following  paragraph  is  added as the  first paragraph in the
     section entitled  "Investment  Objectives, Principal Investment  Strategies
     and Related Risks" beginning on page 3:

During the 2000 calendar year, the Internet sector  experienced a severe decline
as  the  stock  prices  and  market   valuations   of  Internet   companies  and
Internet-related  businesses  were  significantly  reduced.  Many of the  Fund's
holdings  during the year were early stage  companies  and, as investors  became
more risk averse in the face of a slowing  economy,  a number of these companies
suffered  from a lack of  availability  of funds from venture  capital and other
investors. In view of the decline in the sector, the adviser has sought to shift
the Fund's  holdings out of the  companies  and business  areas it feels are the
most  vulnerable  in the  new  market  environment,  and  more  toward  Internet
infrastructure, communications, services, and other companies and business areas
that it believes may be better able to withstand current conditions. The adviser
continues to seek to invest the Fund's assets in companies  that are  addressing
large market opportunities and developing significant  franchises.  Although the
adviser believes that these companies may provide  favorable  opportunities  for
capital  appreciation,  the Fund's  performance during the past year makes clear
that the Internet sector involves  significant risks and the Fund will generally
be more volatile than most other mutual funds.