Industry Spotlight: Venture Capitalism in Boston

Why Are There So Many Startups in Boston?

Alongside the usual Silicon Valley and San Francisco suspects, Boston has long been a major hub for startups—and with good reason. According to a recent article in Inc. Magazine, “Having multiple universities in close proximity with each other”—namely the MIT Media Lab and the Harvard Innovation Lab—“has fostered a culture of turning cutting-edge research and technology into startup ventures.”

So Who’s Funding All of These Startups?

Critical to Boston’s startup ecosystem is the city’s multitude of VC firms, many of which are staffed with graduates of prominent MBA programs. Boston VCs are feverishly surveying the local landscape to fund the next Facebook or Dropbox. Here are five innovative Boston VC firms making waves with exciting new partnerships.

Tell Me More About Venture Capitalism in Boston

Openview Venture Partners

Openview Venture Partners was founded by MIT Sloan alumnus Scott Maxwell in 2006 following stints in the ‘80s “doing technology development at a couple of California startups and the ‘90s working in financial services,” according to an Xconomy interview.

Maxwell was previously senior Managing Director at Insight Venture Partners. According to Forbes, the firm “typically invests between $5 million and $20 million in B2B software companies with between $2 million and $20 million in annual revenue.”

Openview’s notable portfolio companies include digital marketing automation software Salesforce (formerly ExactTarget), digital publishing software Zmags (Gores Group), API management vendor Mashery (acquired by Intel then sold to Tibco), multichannel personalization software Monetate, and social media marketing platform Spredfast.

Polaris Partners

 Waltham-based Polaris Partners was founded by Jon Flint, a lawyer who worked on the research team of the House Judiciary Committee’s Impeachment Inquiry Staff after Watergate; Steve Arnold, who headed the “Games Group” of LucasArts Entertainment in the 80s, and Harvard Business School alumnus Terry McGuire, who was partner at medical and informational technology VC firm Burr, Egan, Deleage & Co. (BEDCO) alongside Flint and Arnold.

According to Fortune, Polaris maintains a “‘generalist’ investment strategy, which includes both early-stage and growth equity investments in technology, healthcare and consumer companies.” Notable portfolio companies include debt management platform ReadyforZero; early-stage women’s health services company DeNova Care; digital retail platform Seamless Receipts; biotech drug therapy startup Xtuit; digital authentication services provider Digicert; and neurostimulation pioneer Neuronetics,

Matrix Partners

Matrix Partners was founded by Columbia Business School alumnus Paul Ferri whose background in electrical engineering made him incredibly well suited to back many key players in the ‘80s personal computing boom, including early investments in Apple and SanDisk.

Ferri’s bio states, “One of the most significant companies was Cascade Communications. Cascade’s founders and employees went on to found some of the most significant companies of the era, including ArrowPoint, Sonus Networks and Sycamore Networks—all of which were Matrix portfolio companies.”

According to a recent Harvard Business School study, Matrix maintains the highest rate of repeat entrepreneurs in the venture industry.

Point Judith Capital

Point Judith Capital was founded by Sean Marsh, a former Prudential Securities Investment Banker; Columbia Business School alumnus and Rex Capital co-founder David Martirano; and Harvard Business School alumnus Zaid Ashai, who previously worked at Energy Technology venture capital firm Good Energies.

Point Judith specializes in early stage investments in software and technology-enabled services. According to Bizjournals, Point Judith’s portfolio companies include “private coaching startup CoachUp, backed by $6.7 million in Series A funding; Pixability, a video ad buying and marketing tech firm that recently landed $18 million in Series C funding; and Nest Labs, acquired by Google in 2014 for $3.2 billion.”

Point Judith typically invests $500k-$3 million in a “first round of financing and reserve additional capital for subsequent financing rounds.”

Charles River Ventures

Charles River Ventures was founded by Wharton alumnus and former Israeli army captain Izhar Armony in 1997 “after working as a VP of Marketing for Onyx Interactive,” according to Forbes.

CRV is based jointly in Cambridge and Menlo Park, California and focuses on early-stage investments in technology and new media companies. The firm has been riding a major winning streak as of late; according to a recent Buzzfeed article, CRV has scored 5 “unicorn” exits—or sales or IPOs of VC-backed companies in excess of $1 billion.

CRV’s “unicorn” exits include Twitter (IPO), Yammer (sale), Millennial Media (IPO), EqualLogic (acquired by Dell for $1.4 billion) and Netezza (acquired by IBM for $1.7 billion).

These Beantown VC firms demonstrate that a combination of innovation, hardcore tech talent, and shrewd investment prove that Boston’s startup climate has, in the words of some hometown heroes, the Right Stuff indeed.