Venture Industry and Government Together Will Grow the Economy

With the financial crisis as a backdrop, venture capitalists and policy makers are today finding themselves on common ground more than ever. Our economy has some serious structural problems. And the way past these problems will be through innovation and job creation. Venture capital has been the engine for America’s new, innovative companies for over forty-five years. Now, with the passage of the American Recovery and Reinvestment Act, Congress and a new Administration have signaled their readiness to invest in this portion of the economy that has created the majority of new jobs during every recovery since the Great Depression.

The passage of the stimulus bill was no easy task. Congress should be applauded for its willingness to make tough trade-offs for the greater good. No special interest group was without disappointment in certain areas. Yet, many of the sectors that are beneficiaries of stimulus dollars are poised to serve our region and country and in the process also improve our long term global competitiveness. These are industries that the venture industry also supports with billions of dollars of capital investment each year. And our industry has the track record to prove its worth. In fact, one out of every ten Americans works for a company that was founded or grown with venture capital investment and guidance. And collectively these companies account for 18 percent of U.S. GDP.

The venture capital community is largely responsible for the creation of the biotechnology industry, the Internet economy, and the software, semiconductor, and personal computer industries. It is poised to create additional jobs in these areas as well as in the newly emerging clean technology sector over the next several years. There is no question that together venture capitalists and the government can create significant value.

With a total of more than $37 billion in funding for clean energy grants, loans, and tax credits, the stimulus bill represents a significant expansion in federal funding for renewable energy, conservation, efficiency—in short, green jobs. Here in New England, these provisions will

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Author: Tom Crotty, Michael Greeley, Paul Maeder, and Terry McGuire

Tom Crotty, General Partner, Battery Ventures Tom joined Battery in 1989 and is responsible for managing all investment and operational aspects of the firm. His primary focus has been on the communications and e-commerce sectors, with investments including @stake Inc. (acquired by Symantec), Advanced Computer Communications (acquired by Newbridge Networks), Amber Wave Systems (acquired by U.S. Robotics), AnswerSoft (acquired by Davox), CipherTrust (acquired by Secure Computing), FaxSav Inc. (NASDAQ: FAXX), FORE Systems (NASDAQ: FORE), Primary Rate Inc. (acquired by Xircom), RADNET Ltd. (acquired by Siemens) and Witness Systems (NASDAQ: WITS). Tom is actively involved in the venture industry and is a board member of the NVCA. In 2005, he was invited to join the board of the Georgia Research Alliance (GRA), which brings together business, university and government leaders in a public/private partnership to build the state’s technology economy. Tom began his venture capital career in 1986 when he joined Abacus Ventures, a partnership focused on communications investments. He has been in the technology business since 1980, holding positions with IBM’s mainframe and minicomputer business. Tom received a BA in Business from the University of Notre Dame and an MBA in Finance from the Wharton School of the University of Pennsylvania. Michael A. Greeley, General Partner, Flybridge Capital Partners Michael is a General Partner at Flybridge Capital Partners focused on information technology, healthcare and medical technology investments. Among a range of general investment themes, Michael is currently focused on opportunities involving the convergence of healthcare and IT, technology-enabled business services, and technologies that address the physical security and homeland defense markets. Michael founded IDG Ventures Atlantic in 2001 before it transitioned to Flybridge Capital Partners in 2008. Michael served on the board of International Data Group, the flagship Limited Partner for the IDG Ventures global network of funds.Previously, Michael was with Polaris Venture Partners, where he focused on both early-stage and later-stage financings for emerging growth companies. Michael founded IDG Ventures Atlantic in 2001 before it transitioned to Flybridge Capital Partners in 2008. Michael served on the board of International Data Group, the flagship Limited Partner for the IDG Ventures global network of funds. Previously, Michael was with Polaris Venture Partners, where he focused on both early-stage and later-stage financings for emerging growth companies. Michael currently represents the firm on the boards of BlueTarp Financial, CERTUS Biomedical, MicroCHIPs, PolyRemedy, Predictive Biosciences, Protein Forest, T2 Biosystems and VidSys and led the firm’s investment in Magen BioSciences. Michael received a BA with honors in Chemistry from Williams College and an MBA from Harvard Business School and was named to the 2007 Mass High Tech All-Star List. Paul Maeder, General Partner, Highland Capital Partners Paul is focused on helping to build the next generation of market leaders in the cleantech and energy sectors. He has more than thirty-two years of experience in information technology and more than twenty-four years in venture capital. Paul currently serves on the boards of Avidyne, Bit9, BlueTarp Financial, Cyren Call, Imprivata, PerkStreet Financial, Predictive Biosciences, StreamBase Systems, Vertica Systems and Village Ventures. Paul also serves on the Executive Committee of the Board of Directors of the National Venture Capital Association and is helping Princeton University with initiatives for furthering innovation in energy and the environment. He is the 2008 recipient of the Mass Technology Leadership Council Commonwealth Award, and is a member of the MIT Energy Innovation Project Advisory Board. Paul holds a B.S.E. in Aerospace and Mechanical Sciences from Princeton University, an M.S. in Mechanical Engineering from Stanford University, and an M.B.A. with Distinction from Harvard Business School. Terry McGuire, Managing General Partner, Polaris Venture Partners Terry McGuire is a co-founder and managing general partner of Polaris Venture Partners based in the Boston office. Terry focuses on life sciences investments. Prior to starting Polaris, Terry spent seven years at Burr, Egan, Deleage & Co. investing in early stage medical and information technology companies. Terry began his career in venture capital at Golder, Thoma and Cressey in Chicago. Terry has co-founded three companies: Inspire Pharmaceuticals, AIR (Advanced Inhalation Research, Inc.), and MicroCHIPS. Terry represents Polaris on the boards of directors of Acceleron Pharma, AdiMAB, Arsenal Medical Incl, Ironwood Pharmaceuticals,Life Line Screening, MicroCHIPS, Inc., Pulmatrix Inc., Tempo Pharmaceuticals and Trevena, Inc. Terry serves on the boards of the Thayer School of Engineering, Dartmouth College (Chair); The National Venture Capital Association (Chair-Elect), MIT’s The David H. Koch Institute for Integrative Cancer Research, and The Arthur Rock Center for Entrepreneurship at HBS.