Just got off the phone with Bill Helman of Greylock Partners, who shed some light on the story everyone is talking (and Tweeting) about this morning: Greylock is moving its home office
from Waltham to Menlo Park.
Sticking around in Waltham will be two partners: Helman and Bill Kaiser. (They also get occasional visits from Greylock chairman Henry McCance.)
Helman said the decision was made by the partners over the past month. "We looked at the data, looked at our returns, and looked at competitive data, to the extent that you can get it," he said. "Then, of course, we get paid to make judgments, so there's a judgment that gets made on top of that. We asked, is this cyclical or secular -- and we came down on the side that this is more of a secular shift than a cyclical one."
"This doesn't mean that Boston is a zero," he continued. "Boston is a terrific location, and there will continue to be success here. But the big change was moving the back office [to California, and deciding to add new partners there.] I have an emotional attachment to Boston. I live in Cambridge. I love Harvard, and I love MIT. But we have a responsibility to our limited partners."
Greylock only has a handful of current portfolio companies
in the Boston area right now. They include Zipcar, Reveal Imaging, Concert Pharmaceuticals, AVEO, and Ounce Labs. I called Roger Tung, chief executive of Concert, this morning, and he hadn't yet heard about the news, though he'd had lunch with Helman (who serves on his board) a few weeks ago.
"They told me they're getting new space on Sand Hill Road, but I just assumed they were moving offices there," Tung said.
Helman said the plan was not to discuss the change until July, when Greylock holds its LP meeting. But apparently rumors were circulating around the grapevine that Greylock was closing its Waltham office and laying everyone off, so Helman needed to set the record straight. (The new space in Menlo Park will be big enough to add a few more partners -- and Greylock is unusual right now in that very few VC firms are growing.)
He said that Greylock raised its most recent fund
in 2005 ($500 million), but hasn't been out trying to raise a new one -- though they're talking about when might be the right time.
Helman portrayed this geographical shift as something that has been taking place over the last eight or ten years for the firm, as the Greylock partnership and portfolio has expanded in the Bay Area. "Fifteen years ago, we were 75 percent Boston and 25 percent Silicon Valley," he said, "but more recently we've become much more focused on Silicon Valley." Portfolio companies out there include Facebook, LinkedIn, Cuil, and Revision3.
"Everybody has been asking me, do you think Boston is terrible and there's no opportunity here," Helman said. "That's not what we think. The issue is one of relativity. We get paid to deliver relative value add. For us, this is about the relative best geography."
My take: this is not such a big change for Greylock, where they've been focused predominantly on West Coast opportunities for a while... but the fact that the firm will be adding partners in the Valley and not in Massachusetts is a net negative for the entrepreneurial scene here.
(Update: Here's the official Greylock release
on the move... and some data and reaction from Bijan Sabet at Spark Capital.
Labels: Aveo, Bill Helman, Bill Kaiser, Concert Pharmaceuticals, Facebook, Greylock, Ounce Labs, Reveal Imaging, Zipcar