Smaller, faster, cheaper: it’s a trend in early-stage tech venture capital that mirrors the rise of the computing industry. The latest exhibit is G20 Ventures, a Boston-based investment firm that has closed its first fund at $63.45 million.
G20 was founded by Bob Hower and Bill Wiberg, both general partners at Advanced Technology Ventures (ATV). The idea is to invest in startups working on technologies for businesses—and bring to bear the expertise of a tight network of successful entrepreneurs, executives, and advisors.
That “group of 20” actually numbers 22, not counting Hower and Wiberg. It includes people like Jit Saxena from Netezza, Andy Ory and Patrick Melampy from Acme Packet, and Ash Ashutosh and Mike Troiano from Actifio. Together, they’ve all put significant money into the fund. (Hower says G20’s other fund investors include high-net-worth individuals, many of whom are connected to the tech industry through finance or other sectors.)
This is not really a new model—but it all comes down to how well the partners and limited partners collaborate, pick winners, and support companies. And it’s part of a broader trend of early-stage tech VCs finding ways to both simplify their mission and draw more effectively from their personal networks.
Hower says that with two partners, making 10 to 15 investments over the next two to three years “is about how many we can focus on.” He adds, “I’d rather be in fewer companies and spend more effort and time.”
G20 has made four investments so far. It led Series A rounds for Evergage, a website personalization firm, and 128 Technology, a stealthy startup led by Ory and Melampy. G20 also co-led a seed investment in Dunwello, Matt Lauzon’s review site for professionals. And it made a later-stage investment in Thinking Phone Networks—a follow-on round for an ATV portfolio company.
Those companies are all in the Boston area. But Hower says G20 will be looking at startups up and down the East Coast in places like New York and Raleigh, NC, as well. The firm’s focus is on enterprise tech, though Hower adds that “trends coming from consumer into the enterprise” are interesting, too.
As for the evolving venture landscape, he notes there has been “a shift in folks wanting to do early-stage investing, and it’s better to be agile. Someone said, you have to be early and right, or late and big.” He adds, “There’s still a need for later-stage big money—to build big companies still takes a fair amount of money.” To build early customer traction and repeatable sales, though, “you can really get running relatively inexpensively and faster,” thanks to open-source software, cloud-computing services, and the like.
The upshot for G20? “Our overarching mission is to build more big anchor technology companies in New England and on the East Coast,” Hower says. But he’s realistic about it. “It’s a tall order,” he says.
