Friday, July 17, 2009

Founders Collective: The Newest VC Firm in Town

I've been working this week to find out more about Founders Collective, the newest VC firm in Boston.

They don't yet have a Web site, though there is a bit about them on LinkedIn, and they've been covered lightly by Mass High Tech, PEHub, and Xconomy in June, when they filed SEC documents stating that they'd raised $24.4 million for a planned $50 million fund.

Here's what I've been able to find out so far...

- The three central founders of Founders Collective are Eric Paley, previously co-founder of Brontes Technologies; Chris Dixon, co-founder of SiteAdvisor; and David Frankel, a South African currently ensconced at the Mandarin Oriental. Frankel co-founded Internet Solutions, the biggest ISP on the African continent. There are four other founders spread across Boston, New York and California, but they haven't been named yet. They won't be working full time on the fund, but rather will help source deals.

- FC has been shacked up at the Boston offices of Flybridge Capital Partners, but will soon move out into their own digs, likely in Cambridge. Flybridge (formerly known as IDG Ventures Boston) made a ton of money when Brontes was sold to 3M, and in 2007, Paley joined IDG (now Flybridge) as a senior advisor. David Frankel, incidentally, was the very first investor in Brontes, which developed 3-D imaging technology for use in dentistry, and originally spun out of MIT research.

- What helped them raise $30 million thus far, on their way to $50 million, was a solid track record as angel investors. They've backed about 25 companies over the last five years, including TrialPay, Canopy Financial, Positive Energy, SiteAdvisor (acquired by McAfee for $70 million), Magazine Radar, Link Medicine, and Hunch.

- Chris Dixon is one of the co-founders of NYC-based Hunch, so he'll split his time between that start-up and Founders Collective. (Working alongside Dixon at Hunch is Caterina Fake, co-founder of Flickr.)

- FC has already made a few investments out of its new fund, and they're closing another next week. They'll typically invest under $1 million, and won't necessarily keep participating in later rounds. They'll aim to get enough equity with the seed investment that they won't be wiped out in later rounds.

- Michael Greeley of Flybridge has only good things to say about FC. "They'll get to $50 million quite comfortably, and that could translate into 60 or 80 companies. Our $300 million fund, in contrast, will be 20 to 24 companies. Their goal is velocity, and I think they'll be a real talent magnet." Already, he says, "they're bringing a lot of volume through the office." Greeley says that the fund will be pretty wide-ranging in its investments: "I think they'll have a highly-diversified seed fund." (Link Medicine, for instance, one of the team's investments that precedes the creation of FC, is a biotech company.) Given FC's strategy of investing early (and not necessarily paying to play in later rounds), Greeley said they will "gravitate to businesses that can get to proof points or break-even with $10 million or $15 million."

- The other VCs and entrepreneurs who provided me info with Founders Collective (and who asked not to be named) all had good things to say about the team. None of the usual VC competitiveness...

- Reached in a cab in Manhattan earlier this morning, Eric Paley didn't want to chat about what they're up to right now, at least until the Web site goes up in a month or so. All he would say was that "information technology has generally been our sweet spot" and "capital efficiency tends to be one of the core rules for us." He sees FC helping to fill the early-stage funding gap in the Boston and New York markets.

We'll keep an eye on them. And of course, do post a comment if you know more...

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Wednesday, June 10, 2009

Five Great Ideas from Today's IT Collaborative Event

There was a whole lot of tweeting going on this morning at the Massachusetts IT Collaborative event at Microsoft's NERD Center in Kendall Square... and the energy level at the event was really high.

One thing that was kind of depressing to me was listening to people like Steven Vinter of Google, Andy Ory of Acme Packet, and Emily Green of the Yankee Group try to sum up what had been discussed over a few hours in just five minutes when Gov. Patrick showed up to "listen." Vinter also showed an egregiously bad slide that tried to, I think, illustrate all the interconnects between various IT clusters in Massachusetts -- but it was one of those slides with an encyclopedia's worth of text on it, bubbles connected to bubbles, arrows everywhere. Rube Goldberg would have been proud, and I suspect it sent the message that the IT industry isn't so sharp when it comes to simplicity or clarity of message.

But there were lots of great ideas in circulation. Here are five that really resonated with me, and a quote I liked:

1. Michael Greeley of Flybridge Capital suggested that CEOs of larger, more successful companies ought to have "office hours" for younger, up-and-coming CEOs, much like college profs do. That could be a nice, low-commitment way of mentoring ... perhaps letting them commit one or two hours a month when they wouldn't have to leave their building. Many people at today's event focused on the issue of mentorship as a key to cultivating a new crop of big, important, sustainable companies here.

2. We need to make federal visa policy an important issue that everyone here in Massachusetts is engaged with. Part of what we do in the state is to make young people smarter. Why do we then allow them to be shipped back home, especially if they'd rather be working (or starting great companies) here? Akamai CEO Paul Sagan paraphrased Thomas Friedman, who has suggested that we staple a green card to every advanced degree we give out in the US.

3. Sagan also mentioned that you can walk or drive through Kendall Square and never know it is one of our region's hubs of innovation. (Perhaps even a denser concentration of smart people, research labs, and cool companies than anywhere in Silicon Valley.) But there are no signs to let you know what's there. If you drive down Highway 101 in California, in contrast, you see all kinds of evidence of the tech economy: Oracle, Microsoft, Yahoo, eBay, etc. The photo above is the blank sign at the front door to Google's Cambridge office, which perhaps 10,000 people pass by every day.

4. Connecting with students is a big challenge. Let's say you run a trade group and you want to make your annual conference open to students... or you want to organize an open house at your company to attract great students for a summer internship. There's no easy way to communicate with the student bodies of the hundreds of great schools around Massachusetts. I wonder how tough it would be to create a wiki that lists the contacts at every school's career office, and perhaps the e-mail addresses of the students who run the entrepreneurship/tech/business club on campus, and a few profs interested in helping be liaisons to industry. This wiki might also list tech companies willing to send speakers onto campuses for classes or club meetings, along with the relevant contact.

5. Tod Loofbourrow, founder of Authoria, had a great take during the session on communication... something that came up in last month's brainstorming session on how we can better communicate the innovative stuff that happens in our corner of the world. He said that pioneering work is being done here on healthcare IT, and making the healthcare more efficient, and that we should commit to saving the U.S. X number of dollars and X number of lives with our innovations. That got us all talking about how Massachusetts is focused not on tech-for-the-sake-of-tech, but technology that solves real problems... whether in healthcare, energy, business, or other spheres. That strikes me as really good positioning.

Finally, I liked Andy Ory's comment that we're still haunted by the ghost of Rout 128 past...and the ghost of California present...but what we really should be focused on is the ghost of Massachusetts' future.

What'd you hear that you liked? Did you post about the event? Feel free to add something in the comments...

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Wednesday, May 13, 2009

Brainstorming: How Do We Better Communicate New England's Innovative Mojo?

We had a great 2.5 hour brainstorming session last night at the offices of Flybridge Capital Partners in the Back Bay, focused on this question: how do we better communicate New England's innovative, creative, entrepreneurial spirit to the rest of the world?

The folks who participated are listed all the way at the bottom of this post. I would've invited more, but we wanted a small-ish group in order to give everyone a chance to participate, and wanted to represent various fields (like energy, life sciences, digital media, etc.)

Here are some of my notes on what we covered. I'd love your comments and ideas.

You can also download the audio of the entire conversation (MP3), or just click play below (it runs about 1:45).

1. The challenge

We don't do a good enough job communicating to the rest of the world the innovative stuff -- and important problem-solving -- that takes place here in New England. We also tend to communicate in a fragmented way as divergent fiefdoms (IE, Providence and Portsmouth and Western Mass. all work on their own strategies) and as verticals (healthcare data and cleantech and defense all work on their own strategies), rather than thinking about communicating about the entire region, and all of our industries. In a competitive global economy, maybe we need to think as a region, not just cities and states.

2. The audience

I suggested that the primary audiences for this communication are:

- Students who come here to get an education, and often leave
- Entrepreneurs in other places who may come here to build businesses in a given field
- Large companies (IE, Google and Novartis) who may feel its important to set up a satellite facility here

Other folks said that there are other audiences, like

- People who already live here, but may not understand the innovation industries
- People who work in one innovation industry, but don't have a good sense of the others
- Alumni: people who once lived here, but have moved away (Dave McLaughlin of Boston World Partnerships used a nifty espionage term for these folks: he likes to say we have "assets" in other locations)

3. The approach

I suggested that we focus mostly on things that are inexpensive (or free) to do, and don't require too much coordination. I told the participants that I didn't want to create six working groups that would each meet once a quarter to figure out what to do. I said my bias was more toward things that we could accomplish in six months to a year, rather than longer-term initiatives... and toward things that would be open to anyone's participation, rather than limited to a chosen group. (We then talked about some of the worthy initiatives that already exist, from Boston World Partnerships to MITX's efforts to connect students with digital media employers to the city of Boston's "One in 3" program.)

4. What's here

We talked a bit about the various industries based here, and the ways we are innovative... from medical devices to defense to transportation to film and the arts to clean energy to social and policy innovation. Saul Kaplan from Rhode Island suggested that instead of listing industries, we should talk about problems that we are trying to solve -- for instance, providing better and more affordable healthcare, dealing with climate change, etc.

5. The common attributes / what we're good at

We spent a nice chunk of time talking about the things that are common across all of the innovation we do:

This area is an "academic Hollywood" that attracts bright students and profs. (Some preferred the term "intellectual Hollywood.")

We punch above our weight... we're a small region that has a big impact on the world.

We're scrappy.

We connect across silos to solve problems.

We constantly reinvent and rebound -- the region always comes back after economic dips.

Contrary to the popular Brahmin perception, Dave McLaughlin of Boston World Partnerships noted that Boston is one of the most youthful cities in the country. (Second only to Austin, I think...)

Education is the root of everything that we do. I suggested that we're good at taking academic research, adding money and entrepreneurial expertise, and building companies that matter to the world.

Saul Kaplan suggested that we're focused not just on inputs to innovation (new research, patents, start-ups, and VC), but the outputs, too: having an impact on big problems in the world.

We're good at exploring the intersections and convergences of different-but-related fields.

Jamie Tedford of Brand Networks made the case that we (innovators) are the best salespeople for the region. (Me: Maybe we just need to be more coordinated or more clear about what we're selling.)

6. What we might do

Get more students to go to networking events/conferences. I mentioned the StayinMA program that Flybridge started, which provides scholarships to students to cover the registration fees.

Collect all of the studies about the economic impact of N.E. innovation in one place

A site/blog that serves as the "Daily Candy" of N.E. innovation

I suggested a one-page "talking points" sheet that people could download so they'd have a picture of what happens here, and be able to speak about it broadly ... for instance, if you sit next to someone from Iowa on a plane. Nick d'Arbloff of the New England Clean Energy Council talked about illustrating the impact of innovation here with charts, images, and graphs. (Maybe an iPhone app?)

More mentorship from successful execs/entrepreneurs

A wiki to collect info about various groups/associations/funding sources/companies connected to innovation here. A directory of innovation, someone termed it, or a "wikipedia of New England innovation."

We should have salons to connect students/young people with established entrepreneurs/innovators. (Bob Metcalfe does these occasionally at his Back Bay home.)

We might distribute Flipcams to people to go out and build a library of entrepreneur/innovator interviews. (Perhaps students at b-schools?) Another video-related project, which I think Don McLagan said he and MITX are working on, involves encouraging students to produce short videos about their first year at their first job at a company here in Massachusetts, for consumption by other students.

Doug Levin talked about creating an "oasis online geared to students."

I suggested that we need to create more ways for students to visit companies... one thought is picking a Friday every month when several companies around the region might host a lunch for students, where they could hear about what the company is working on, meet the CEO or key execs, and get a tour. Kind of a "tech trek" that would run the entire school year, not just for a week during spring break. (Which is when many b-school students head out west to visit innovative companies.)

Think about things that can leverage the unemployed, and their time. Steve Wardell mentioned that he relied on unemployed folks to help run a big event he put on in February, about healthcare IT...and I mentioned a local entrepreneur who has been thinking about ways to encourage unemployed folks to team up to try to develop start-up ideas. (Not sure if he's ready to talk about it yet...)

Homecoming Weekend: Encourage towns around the region to invite their natives back on one specific weekend, like July 4th or some time around Xmas... and spotlight companies hiring and things happening in those towns. (Newburyport apparently has a homecoming weekend like this.)

On the train ride back to Cambridge, Steve Wardell suggested that we need to get more innovators blogging, at little companies and big ones. "We need to create 1000 Scobles," he said, referring to the famous ex-Microsoft blogger. "We should encourage more people here to use social media, to get away from the perception that Yankees are insular and clubby and only talk amongst ourselves."

7. Next steps

I'm working on a small project to declare that June is "Innovation Month in New England," with a few collaborators. There are an incredible number of innovation-related events happening next month across the region, and we're going to spotlight a few and try to encourage people to attend at least one, if they agree with us that innovation and entrepreneurship are what will help the economy rebound. We'll start using the tag #neinno for reporting on those events, and see if that catches on for Tweets and blog posts and photos about innovation in the region.

I think/hope that other folks who participated last night will develop some of the ideas they feel most strongly about -- and if they do, I'll point you to those projects from this blog.

(Update: Here's a post about the discussion from Saul Kaplan, the delegate from Rhode Island.)



Fresh Tilled Soil


(formerly Comerica Bank, Mass Biotech Council)

Flybridge Capital Partners

Conn. Tech Council

Boston Redevelopment Authority

KMC Partners

NE Clean Energy Council

Mass. Technology Leadership Council

Business Innovation Factory

Kel & Partners

Boston Globe / Innovation Economy

Boston History & Innovation Collaborative


Entrepreneur & NE Clean Energy Council Fellow

Forrester Research

Boston World Partnerships

Entrepreneur (formerly

Mass. Innovation & Technology Exchange

NH Technology Council

Scott Lyon

Long River Ventures / Venture Well

Brand Networks

HIL Forum

Flybridge Capital Partners

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Wednesday, May 6, 2009

Entra: The Stealthy New Start-Up from Yet-Ming Chiang and Michael Cima

I kept hearing that A123 Systems founder Yet-Ming Chiang was up to something new, so I've spent a few days putting together the pieces.

Turns out he has launched a new company, Entra Pharmaceuticals, to commercialize some drug delivery technology that he and fellow MIT prof Michael Cima cooked up a couple years ago. But they're not just creating an inexpensive, disposable new device that Cima refers to as a "patch pump" -- they're also working on a new drug, too. "The strategy is to make a product with the drug on board," Cima says. "Instead of a $5000 pump, this is a transformational technology that's less expensive, smaller, and less complex."

Unlike a passive nicotine patch, Chiang says their device does involve electronics. "A good way to describe it is 'smart' and 'active,'" he said during our game of Twenty Questions this afternoon. Neither founder wants to be specific about the disease they're addressing, though Cima says it won't be diabetes.

Both Chiang and Cima are board members and consultants to Entra, visiting the company one day a week for a technology update. They've hired Frank Bobe as chief executive, who was formerly chief business officer at Alseres Pharmaceuticals. (Alseres is a 17-year old company that has yet to get a drug approved, and was [updated] just de-listed from Nasdaq.) Heading up business development is Shobana Albrecht, previously at BG Medicine and Baxter. Rick Gyory is VP of product design and development; he earlier worked at Transform Pharmaceuticals and ALZA Corp.

Interestingly, Entra is now located at the BU Photonics Center near Kenmore Square -- the very same building where A123, Chiang's last company, was hatched. (Battery-maker A123 raised $69 million earlier this year, as it remains in a holding pattern waiting to go public.)

Here's the key patent MIT has licensed to Entra, which seems like a hybrid of a transdermal skin patch and a wearable infusion pump.

"Many new drugs have short half-lives," Cima explains. "They're metabolized quickly. So to get the right exposure, you have to hook yourself up to an IV for continuous administration, or if you do a bolus dose, you have to go really high, and a lot of the time the side effects you get are associated with that high concentration. With a device you can wear, you can achieve a long half life" without having to do either of those things, and without having to redesign the molecular structure of the drug itself. "That's the value that we bring, at a high level," Cima says.

This is the first life sciences start-up for Chiang. He told me that the science behind Entra was initially funded by a DARPA grant, and then by MIT's Deshpande Center. "The idea behind Deshpande is to help new technologies get through the 'valley of death,'" Chiang said, when they're not raw research any more, but they're also not yet a commercializable product. "That really worked in this case."

Up to now, the only real known info on Entra was a PEHub report last December noting that Flybridge Capital Partners and North Bridge Venture Partners had put $4.2 million into the company in an A round -- and will increase that amount to $12.5 million if the company hits certain milestones this year. The board member representing Flybridge is Michael Greeley; Jeffrey McCarthy represents North Bridge. This is the fourth Cima-related start-up that Greeley has been involved with.

(Another recent collaboration between Cima and Greeley is Certus Biomedical, which will soon change its name because of some trademark conflicts. Very little is known about that company, either, although its backers are Flybridge, Ed Kania at Flagship Ventures, and Kevin Bitterman at Polaris Venture Partners.)

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Monday, March 2, 2009

How the VC Scene in Boston is Changing

Sunday's Globe column dealt with the shrinkage of Boston's VC universe. Column got snipped quite a bit, so I'm publishing the full version below, along with the video.

Venture capital sector makes adjustments

For Boston’s venture capital community, headquartered on the placid plateau of Mount Money in Waltham, 2009 will be a year of wrenching change. The stream of capital flowing to venture capital firms, who invest it in innovative-but-risky private companies, is turning to a rivulet – and that means the firms themselves will have to get smaller.

“Last year, our industry raised about $28 billion in new investment capital,” says Michael Greeley, chairman of the New England Venture Capital Association and managing director of Flybridge Capital Partners in Boston. “I think we’ll raise between $8 billion and $12 billion this year, nationally. That’s a dramatic reduction. My sense is that the average fund size will be cut in half, and they’ll have to cut the number of partners who work for them as a result.”

The shrinkage of Boston’s VC sector will be tough for the VCs, obviously, and also for entrepreneurs who ascend Mount Money with their PowerPoint presentations, looking for funding to launch a company or keep one going. But it could also have a silver lining.

Here’s what’s happening.

Two local VC firms have already put together smaller investment pools than they’d hoped for. Atlas Venture, in Waltham, had aimed to raise about $400 million but wound up with $283 million; as a result, last month Atlas jettisoned two of its partners and shifted two others to less active roles. Boston-based Bain Capital Ventures will likely wind up raising between $475 million and $550 million for its latest fund, rather than the $750 million it had set out to collect. Money in a venture capital fund is typically invested over the course of a decade.

Kodiak Venture Partners of Waltham has reduced the number of investors on its roster and is shifting its focus toward life sciences and medical technology as part of an attempt to burnish its appeal to would-be investors. Andrey Zarur, a partner there, says Kodiak isn’t out looking for new money right now, but plans to be at some point in the future.

“Kodiak just hasn’t had enough liquidity events to make their limited partners say, ‘I’m ready to step up again,’” says Howard Anderson, an MIT lecturer and former venture capitalist. (Limited partner is the term for the university endowments, wealthy individuals, and pension funds that funnel money into venture capital.) One example Anderson cites is Egenera, Inc., a Marlborough company selling technology for data centers that raised $176 million but never managed to go public. Anderson should know: his old firm, YankeeTek Ventures, was an early investor in Egenera.

Many other local VC firms are on the road, talking to prospective sugar daddies. Some have been at it longer than others. Among the firms trying to scare up more money in 2009 are Boston Millennia Partners, Highland Capital Partners, Polaris Venture Partners, Prism VentureWorks, Oxford BioScience Partners, Charles River Ventures, and North Bridge Venture Partners. New firms, like Genovation Capital and a medical device oriented fund called Makaira Venture Partners, are also out trying to raise their first funds.

Venture capitalists are prohibited by the Securities and Exchange Commission from discussing their fund-raising activities. But one partner at a Boston area VC firm that’s trying to put together its next fund told me last week that fundraising is happening “on a molasses pace,” adding that “universally, everyone is going to be lower than what they’d hoped to raise.”

One reason that the limited partners are avoiding commitments to new VC funds is that many of them have formulas for how they allocate their assets. If a certain percentage is devoted to bonds, a certain percentage to stocks, and a certain percentage to venture capital and private equity, for instance, things start to look out of whack when the stock portion of the portfolio plunges and the value of the VC portion stays roughly the same. (The valuations of the private companies in a venture capital firm’s portfolio isn’t updated very frequently, unlike publicly-traded stocks.)

If a limited partner needs to get their mix of asset allocation back in order, investing in new VC funds simply doesn’t happen. (Some limited partners, including the endowment managers at Harvard, Duke, and Columbia, are actually trying to sell the stakes in VC funds they already own – but there are few buyers.)

And investors who can’t get their money into the best-performing venture firms may simply be disappointed with the financial returns they get. “I’ve heard limited partners say that the VC business, in some cases, is like getting Treasury bill returns with venture capital levels of risk,” says Michael Feinstein, an ex-VC. “If you look at the median venture capital return over the past eight years, it’s about one percent a year.”

Josh Lerner, a Harvard Business School professor who studies the venture capital industry, describes what’s happening among limited partners as “a changing of the guard.” University endowments and U.S.-based pension funds are becoming smaller players in new venture capital funds, Lerner says. But what’s not clear is who will take up the slack – though sovereign wealth funds and pension funds from Australia are two potential candidates. “We can see who’s going out,” Lerner says, “but not who’s going in.”

The upshot is that VC firms will be managing smaller funds, and some firms will go out of business. Anderson, who refers to Atlas’ situation as a harbinger of things to come, predicts that some funds that aren’t in the 25 percent when it comes to delivering financial returns will simply fade into the sunset. “Everyone will swear to be in that top quartile, but this isn’t Lake Wobegon – not everyone is above average,” he says.

Fewer firms and smaller funds will obviously mean fewer jobs for venture capitalists and the staffers who support them. It’ll undoubtedly get harder for start-ups to raise money. It will take longer, and those that do manage to attract an initial jolt of capital will get less of it than before.

“There just won’t be as much money flying around,” says Todd Dagres, founder of Spark Capital in Boston. “And there’s good in that. If you can raise money for your start-up now, there’s going to be a lot more uniqueness value than there used to be.” In other words, entrepreneurs will run up against fewer well-funded competitors than they once did. That could help the entrepreneurs and their backers both.

Still, a contracting VC universe isn’t going to be as fun to inhabit as an expanding one – at least for most people, at least in the near-term.

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Monday, February 9, 2009

Tomorrow at the State House: Event on Education, Entrepreneurship & Mentoring

MassEntrepreneurship 2009, taking place Feb 10th at the State House in Boston, focuses on how universities can better support entrepreneurship -- a really important topic. After the requisite intro from the Governor, there are two panels: one on running mentorship programs that connect students with experienced businessfolk, and another on supporting young entrepreneurs. The event is free, but you need to register here.

And while we're on the topic of supporting young entrepreneurs, Jeffrey Bussgang of Flybridge Capital sends an update about the Stay in MA program, which helps cover the cost when students attend industry networking events and conferences. Bussgang writes:

    ...[I]n the first month of the program, we have granted over a dozen student scholarships for students from Babson, BU, MIT, Harvard, UMass Boston and even one high school. We are actively marketing the program on campuses throughout the state and have developed partnerships with nearly every local business association. The breadth of the associations supporting it are awesome – check it out at The website attracts over 1000 visitors per month.

    The feedback has been terrific. ...The Governor has been super-supportive as well – he’s asked for direct updates from us and enlisted his Secretary of Economic Development to assist in promoting.

Lots of organizations are involved, and are doing a better job of promoting Stay in MA on their Web sites to let students know about the program.... the only notable non-participants are the Greater Boston Chamber of Commerce and the Massachusetts Biotech Council.

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Tuesday, December 16, 2008

Flybridge Makes It Easier & Cheaper for Students to Network and Learn

I hope this isn't seen as just a Flybridge initiative.... but the Boston VC firm has launched "Stay in MA," a program that offers students a free or cheap way to attend industry events and conferences. The VC firm is creating a $5000 scholarship fund as a test; students can get up to $100 per event to attend the events they're interested in and get plugged in to the innovation economy. That's excellent.

Here's the official Web site and here's the Xconomy coverage.

Students: start your engines, and take advantage of this!

Update: Unfortunately, most of the associations participating in this initiative don't actually seem to want to let students know about it. It'd be a no-brainer to list on their Web sites and event pages that students can get 'scholarships' to attend. None are doing that yet, though at least MassNetComms has posted the press release.

Also, it's interesting that two of the biggest trade associations around, MassTLC and Mass Biotech Council, aren't participating. Maybe getting students involved is not part of their mission?

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Thursday, November 20, 2008

Kleiner Perkins Dialing Up Activity in Boston?

Last month, Michael Greeley of Flybridge Capital off-handedly mentioned that Kleiner Perkins had dialed up its presence in Boston, with two partners located here.

So I wanted to check if that was true.

When I asked KP's PR person if there was anyone based out here permanently, or an office that they'd set up in Boston, their reply via e-mail was, "KPCB’s official offices are in China and California. There is a plethora of innovation happening in the Boston area, and KPCB is involved in identifying new ideas and helping to build companies." They apologized for not being able to share more details.

Greeley mentioned that Tom Monath (formerly chief scientific officer at Acambis) is on the KP team, and based in Boston. KP wouldn't confirm that. But here's a two-year-old Mass High Tech article mentioning that they'd brought Monath on board, and were opening an office. But Monath seems to live in Harvard, Mass., and I couldn't find a listing for KP in the Boston area, though he is still listed on KP's Web site as a partner in the firm's "pandemic and biodefense fund." (He didn't respond to my e-mail last week.)

What Kleiner does have locally is a "strategic partnership" with GreatPoint Ventures in Cambridge. Kleiner doesn't have money in the GreatPoint fund, but they do get a first look at "interesting deals we bring them," according to Aaron Mandell of Great Point. That arrangement has been in place for "about six months," he said. They've invested together in GreatPoint Energy and Alta Rock Energy, a geothermal energy company. Mandell said GreatPoint is definitely not an affiliate or "branch office" of KP...

Among Kleiner's Massachusetts portfolio companies are CodonDevices, Bit9, Epizyme, Mascoma, Upromise (acquired by Sallie Mae), and Lilliputian Systems, which just yesterday announced plans to expand its manufacturing facility and add about 100 jobs.

Are you hearing about other KP activity in town? Post a comment if you would....

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Tuesday, July 29, 2008

Snapshots from a VC Summer Shindig

Flybridge Capital Partners (formerly IDG Ventures Boston) held the fifth edition of their annual 'Catch the Wave' shindig this past weekend. Most of the attendees are entrepreneurs, and the gathering happens in Kennebunkport, Maine.

The big event is the Saturday night costume party. This year's theme was 'Rockstravaganza,' and some of the costumes were great. Photos are here.

Below is the Flybridge team dressed as the Village People....and a pair of guests as the Blues Brothers.... and a most excellent Amy Winehouse.

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Friday, July 25, 2008

Stonebraker's Latest Start-Up: Byledge

Database pioneer Mike Stonebraker is quickly becoming one of Boston's most prolific parallel entrepreneurs. When I wrote about him last December in the Globe, it sounded like there was something new cooking.

Turns out, there's at least two new pots on the Stonebraker stove. (Stonebraker is a founder of StreamBase and Vertica, which have together raised more than $50 million in VC funding... and earlier in his career helped start Ingres Corp., Illustra, and Cohera.)

The first is Byledge, a new company funded by Kepha Partners and Flybridge Capital Partners (formerly IDG Ventures Boston.) There's no site yet, and no funding announcement. The company hasn't set up offices, but there's a team taking shape, and a rough strategy.

I'm told, by someone who is familiar with the company, that Byledge will focus on "long tail travel search," scouring the Web for hidden information about lodging, restaurants, activities, and events and organizing them in easily searchable databases. (Another person who knows about Byledge described it as "semantic enrichment" -- trolling for unstructured data and then applying the right tags and labels and categories to it.) If you're looking to go salmon fishing in Alaska, how do you find all the guides, and information about the terrain they cover? Byledge aims to supply the answer.

That places the company squarely in the middle of Boston's travel info cluster, which includes companies like TripAdvisor, ITA Software, and Kayak, which is partly based here and partly in Connecticut. Kayak co-founder Paul English told me he hadn't yet heard of Byledge when we spoke yesterday. The idea sounds to me like it's closest to what TripAdvisor does -- but TripAdvisor relies heavily on human editors to organize and clean up information from around the Web.

The Byledge technology originates at MIT, where Stonebraker is a prof. I'm told it was developed by a researcher named Mujde Pamuk, who has worked alongside Stonebraker at CSAIL, the computer science and artificial intelligence lab. (Here's some of Pamuk's published work, with Stonebraker as co-author.) Also involved in the start-up are Andy Palmer, who also helped start Vertica; Vince Russo, a former chief architect at Lycos; and Mark Watkins, who headed the development organization at the enterprise search start-up Endeca, and before that worked at PTC.

Stonebraker isn't talking about the company, describing it as "currently in stealth mode" in an e-mail. Chip Hazard, the Flybridge partner who's serving on Byledge's board, wouldn't talk about the company's focus but hinted that it could be broader or different than travel. I'm told that Byledge may try to both license its technology to other companies and also run its own destination site on the Web, a hybrid strategy that Paul English characterized as pretty difficult to pull off.

Andy Palmer said that "we're gonna work pretty hard to keep our cards close to the vest." But he did tell me that both he and Stonebraker will remain involved with Vertica. He wouldn't say how much the company raised, except to describe it as "well-financed." Hazard said they have "enough to get the company to critical milestones. It's not $50,000." Update: Tango at Kepha Partners wouldn't peg the exact amoung, but wrote via e-mail that "we did a seed round a bit ago and did close an A round recently." Byledge is the third investment for Kepha, which is essentially a one-man firm.

Stonebraker's second new project is an initiative that will be part of Vertica, code-named Horizontica. Palmer describes it as an open source database designed for cloud computing applications. Sounds like there's some cool potential there.

Vertica's also in the midst of preparing for a move from Andover to Bedford.

How many projects can one person juggle simultaneously, while still teaching at MIT? Stonebraker seems intent on setting a record.

Byledge, by the by, is the name of the street Stonebraker lives on in Manchester, NH.

(A thank-you to Genotrope, where I stumbled across the first mention of Byledge.)

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Wednesday, June 11, 2008

Competitiveness in the New Search Economy

A provocative post this morning from Jeff Bussgang at Flybridge: is our region deficient in search engine marketing and optimization talent?

The opening:

    Ask any consumer start-up what their biggest obstacle to growth is and it's likely you'll get a consistent but surprising answer: I simply can't find enough SEM/SEO talent. It's not a shortage of programmers that are hindering start-up growth (much of the coding talent is being provided by offshore developers anyway), but rather the talent pool hasn't adjusted quickly enough to support the new Search Economy.

Jeff also offers some thoughts on how we might remedy things...

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Thursday, April 17, 2008

What Happened Between IDG and Flybridge?

I'm developing a few columns related to the venture capital world, so this afternoon I had a chance to chat by phone with IDG founder and chairman Pat McGovern.

One topic I wanted to ask him about was the split between IDG and the former IDG Ventures Boston team, which rebranded itself last month as Flybridge Capital Partners.

I'd run into Jeffrey Bussgang last week, one of the original partners at IDG Ventures Boston. He said that there were no hard feelings between IDG and the Boston investing team... but that IDG had chosen not to put money into the new $280 million Flybridge fund, after participating in two prior IDG Ventures Boston funds.

McGovern told me this afternoon that when the IDG Ventures Boston team asked how much he wanted to invest in their third fund, he said that he'd been getting better returns investing outside the US. (McGovern and IDG have funds in China, Vietnam, India, and Korea, among other places.)

"We didn't think the returns were competitive with the returns we could get elsewhere," McGovern said.

He was also bothered by the Boston team's desire to do more investing outside of New England and the East Coast. "They didn't want to stay east of the Mississippi," McGovern said, and they wanted to invest in some sectors outside of pure IT. (Another IDG fund is based in San Francisco.) "Your goals and the IDG brand are no longer aligned," McGovern said he told the Boston team.

"We agreed, they'll change their name, and raise money from people other than IDG," he said. (In 2005, when the Boston team raised its second fund, a $180 war chest, IDG had put in $25 million.)

Oddly, McGovern, who gave $350 million to MIT to start the McGovern Institute for Brain Research, said he thought the Boston team's forays into med-tech and diagnostics, like Predictive Biosciences' urine-based cancer tests, were too much of a stretch. "They were getting into areas where was no longer the major competitive advantage."

But McGovern said that "we're hoping that they do extremely well," referring to the new Flybridge fund. "We still have a lot of cash at stake in funds I and II." He said the team's historical returns had been "better than average."

McGovern is not totally pulling out of U.S. venture investing, however. McGovern said he's supporting a second IDG Ventures San Francisco fund, currently being raised. "We're putting 25 percent of the money into the new fund, which is a month or two away from closing at $180 million," he said.

I also spoke today with Flybridge managing partner Michael Greeley. (Disclosure: Greeley and I serve on the advisory board of the Nantucket Conference together.)

Greeley said, "It's a mischaracterization to say we've gone off-strategy," adding, "[Pat] has great personal interest in the healthcare convergence scene," given his philanthropic activities. Greeley also said that he expected about 80 percent of the new fund's investments to be companies that the partners can drive to from Boston, though he wouldn't rule out doing a seed deal on the west coast (though he termed it "unlikely").

Greeley says one big reason for the name change, and the split from IDG, was that he worried entrepreneurs would confuse his new fund with the IDG Ventures San Francisco fund. He and the other partners said that raising money for this new fund wasn't a problem, even without IDG's allowance: "We did not to an offering memo" to market the new fund, Greeley told me.

He also told me that the firm is looking for new space in the Back Bay, having outgrown its current digs at One Exeter Plaza, IDG's headquarters. "It's a shame not to be able to bring on entrepreneurs-in-residence because you don't have enough space," Greeley said.

(PEHub's Dan Primack served up some inside info on the relationship between McGovern and the new Flybridge fund last month.)

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