The State of VC in Boston: A Q&A with C.A. Webb
This Saturday, General Assembly is holding an all-day event on how to raise capital, featuring a number of interesting panels. One of those is a panel on the future of venture capital that will be moderated by C.A. Webb, executive director of the New England Venture Capital Association.
Webb is as looped into Boston’s venture community as one can get, and so we asked her to give us a preview of her thoughts on the venture industry, as well as to explain the role of the NEVCA and how she views the Boston ecosystem. If you want to hear more, or what panelists Dustin Dolginow of Atlas, Matthew Witheiler of Flybridge, David Cappillo of Goodwin Procter and Wan Li Zhu of Fairhaven Capital have to say, you can register for the event here.
With the release of the Kauffman Report a while back, rumors of the demise or at least dire state of the VC industry are back in fashion. Do you buy it?
Every industry has its inflection points and venture capital is experiencing a big one right now. Venture is too meaningful a source of capital and driver of scalable innovation for it to die. Talk to entrepreneurs who started their careers in Europe or South America where this kind of capital is nearly impossible to access and you quickly understand what a powerful and positive force venture capital can be. So, no, I don’t buy the demise of venture capital.
Venture Capital is, was, and always will be a cyclical business. The truth is there are a finite number of businesses well suited to the venture financing model, which as you know is all about funding a bunch of businesses with the potential to deliver an outsized return, and sticking around until one of them does. In good times investors see those returns, capital in excess of that which can be invested well flows in, valuations expand, and returns drop. Then capital flows out, leaving the strongest firms in a stronger position. Startup valuations decline in the face of limited capital, returns improve, etc. There’s no doubt we’re in a bit of a downturn after a big capital inflow, but the system works over the long run, and the businesses that depend on that system are essential to the local, national, and even global economy.
Boston as a startup hub and Boston VC in particular can get a bad rap as being stodgy, old school and not collaborative enough. How has your experience been working with the city’s VC’s? Is there collaboration? Are things changing? Where the stereotypes never true?
Since starting this role in January, more than a few people have said something along the lines of, “You must have your hands full dealing with so many big egos.” I have to tell you, I think I have the best job in Boston. The VCs I work with are enormously talented, intelligent and thoughtful. I think we have fantastic talent in our VC community and I also think there’s a lot of room for the community to come together and have a stronger presence here.
I’ve been involved with companies that have raised money from Boston VCs and benefited tremendously from those relationships. I think there’s a huge home court advantage to investing locally and getting day-to-day, on-the-ground insight from both the investor and entrepreneur perspective. We have many local firms (Atlas, Battery, Bessemer, Charles River, Flybridge, Highland, Matrix, Northbridge to name a few) doing a lot of deals in town. And these are also the VCs you’re more likely to bump into at the CIC or Voltage because they’re focused on connecting with entrepreneurs in Boston.
Explain the role of the New England Venture Capital Association and what you hope it can accomplish in the ecosystem.
NEVCA is a platform for local venture capital firms to advance their common interests. We’re a collective voice for the venture community, focused on making sure Boston remains the best place in the world to start and grow a new company. We represent nearly 100 venture firms investing in everything from consumer tech to SaaS to hardware to robotics to biotech. We are here to listen hard to the needs of this entrepreneurial eco-system and fill in gaps and invest in great efforts that keep this place thriving.
I’m interested in working with our VCs to shine the light on amazing companies we’re backing and taking more of those stories to the national stage. And also on moving the needle on student talent retention here in Massachusetts. We want every student in the Commonwealth to understand what a thriving startup community we have here.
You’re the New England Venture Capital Association, but we all are hearing a lot about New York these days. Do we need to start thinking of New York and Boston as two hubs in the same greater region? Or is New England the right unit to develop our innovation economy?
It’s always hard to generalize across a whole region, but I think the two venture markets are different. New York is a hub of media, finance, and consumer marketing, so the startups there tend to be of those worlds. Boston is a global leader in enabling sciences across biotech, enterprise IT, materials, big data, mobile…we seem to be generally better at those things. That said there are great biotech companies forming in New York, and great consumer companies getting funded in New England (Zipcar, Wayfair, and Gazelle being recent examples).
In general, I think a little too much is made of the regional rivalry. Capital doesn’t root for the Giants or the Pats. It just wants to win.
from BostInno http://bostinno.com/2012/06/20/the-state-of-vc-in-boston-a-qa-with-c-a-webb/