When Charles River Ventures (now CRV) announced their new fund, the venture capital firm explained that, over the course of its history, the fund had started to go west towards Silicon Valley. They weren’t the first firm to do this. Five years ago, unicorn VC Greylock also made the shift.
In CRV partner Jon Auerbach’s own words:
“We remain committed to Boston…But the West Coast is where the center of gravity for technology and investing, especially in consumer, mobile and cloud computing, has clearly shifted.”
While we previously covered CRV’s latest fund-raise and their strong investment history in California, we decided to analyze new investments by geography of several other prominent Boston-based VCs in order to see which, if any, remain Boston-focused and which are leaving Beantown behind. The data below.
The Hometown Heroes
The Fair-Weather Fans
The Hometown Heroes
Atlas Venture, one of the most established brands in Boston Venture Capital, has invested locally, having targeted Massachusetts more than any other region every year since 2009. In fact, thus far in 1H 2014, 67% of their first investments have been based in Massachusetts including their two largest, Navitor Pharmaceutical’s $23.5M Series A and Ataxion’s $17M Series A.
North Bridge Venture Partners
Waltham-based North Bridge Venture Partners has remained loyal to their original home state over the years. The fund opened a San Mateo office in 2007, however this did not shift investments as radically as others. With the exception of 2012, when the fund made first investments in California-based Quora, Message Bus, OneID, and LiveRamp, Massachusetts has held equal or more first investment deal share than any other single geographic area and has increased in 2014.
Waltham-based Polaris Partners has made over 100 investments in healthcare companies since 2009. Since the firm announced its plans to open its California office in 2011, CA investment share has gone up. While not fair-weather quite yet, Polaris looks like it might be teetering.
The Fair-Weather Fans
Flybridge Capital Partners
In 2009 Flybridge launched a program for students to foster entrepreneurship in Massachusetts called “Stay in Mass”. But since then, Flybridge has ‘stayed in mass’ much less. Their 2012 NY office opening spearheaded a focus on other geos (including two new investments in NYC – Carnival Labs and BetterCloud). 2013 saw the lowest first investment share in MA over the past 5 years highlighting the firm’s shift away from its home.
Cambridge-based General Catalyst opened an office in Palo Alto in 2011, and shortly thereafter, their first investments in California-based startups doubled from 27% in 2011 to 58% in 2012. California now leads all geos for first investment, while Massachusetts accounted for a paltry 15% in 2013. Of course, it may be difficult to stay loyal to MA when the opportunities to add companies like AirBnB, Snapchat, Stripe, and Zenefits to your portfolio are calling from the West Coast. If any consolation to folks in Mass, General Catalyst investment activity into Mass has rebounded in the first half of 2014.
Highland Capital Partners
Highland Capital Partners, a fund with headquarters in Massachusetts and offices in California, Switzerland, the UK, and China, has their eyes set more on the Valley and elsewhere. In fact, since 2009, Massachusetts has only out-paced California for first investments once (2011). Interestingly enough, other regions have dominated both MA and CA given HCP’s international focus.
Spark Capital was founded in 2005 and has been based in Boston ever since. While the company has invested in Boston-based success Wayfair, many of their notable investments including Twitter and Oculus VR are based in California. With investments like those, its no surprise that Massachusetts hasn’t received much love from the firm over the years, especially in 2012 and 1H 2014.
For further reading check out this analysis on Boston’s Seed Investors staying local. All of the underlying data for this brief comes from CB Insights venture capital database. Login or create an account below.
photo credit: Bill Damon