Yesterday, the big news in the venture community was about Greylock Partners, one of the premier venture capital firms in the world. Greylock is moving its headquarters to Silicon Valley.
Greylock was founded in 1965 and had been based here in MA since inception.
What does this mean for Boston based entrepreneurs and VCs?
Here are my thoughts.
0 – If I wanted to put a positive spin on the Greylock move, I would just wish them well and enjoy their departure. Less competition for those of us staying.
But the reality is that this was expected for a long time. They have not been active here for years. It’s no secret that the younger partners they have recruited over time are on the west coast. Their internet and consumer investments have mostly been west coast based while their east coast efforts have been focused on biotech & life sciences.
1 – Having said all of that I am concerned about our local market. We haven’t been as active specifically in Boston/Cambridge as I would have hoped. And it’s not just Spark. Many of my VC colleagues tell me they are looking into NYC and are investing actively on the west coast. Take a look at this chart I grabbed from a PWC report on the Massachusetts annual share of VC per year.
Where will 2009 and 2010 end up? Unclear but I don’t love the trend.
2 – We are seeing big changes in the Boston VC market that are promising but will take time. Several new firms have launched with new funds and are active. Our firm, Spark Capital, and other firms like Flybridge Capital, General Catalyst, .406 Ventures and others. And while I miss YCombinator for sure, I’m happy that Boston is getting more attention from the outside. Foundry Group is making investments here as is First Round Capital and others. And TechStars just launched in Boston. I have high hopes for our new Start@Spark program too.
3 – Massachusetts has roughly only 2.3% of our nation’s population but receives about 10% of VC dollars nationwide. Life sciences, energy, software and internet technologies will remain quite strong and promising.
4 – We need to create an open environment for innovation. We need to get rid of employee non compete agreements. That isn’t the only issue but it’s a big one. I encourage you to support MA House Bill 1794 if you live here. Call your state rep, tell your neighbor, tell your coworkers, sing a song, tweet and blog about it.
We have a lot of opportunity here and plenty of raw materials. But we need to improve and compete at a higher level.
And when I say “we” I mean all of us. VCs, angel investors, successful entrepreneurs, new entrepreneurs, failed entrepreneurs, big companies, small companies, universities and government.
We can do better.