larger, more established firms like Andreessen Horowitz and Sequoia Capital. One example, he says, is that CRV and others have hired staff members dedicated to providing services to portfolio companies, such as help with recruiting talent.
“I think the venture model has changed,” Armony says. “But I respectfully disagree with the notion that the venture model is broken, and also that seed funds will be the ones that will change it from below.”
And perhaps it’s not imperative for every fund to have some sort of calling card or feature that sets it apart from other VCs. Vivjan Myrto—founder and managing partner of Hyperplane Venture Capital, one of the new Boston firms—says the important things for investors are to stay focused on their “core thesis and strategy,” execute on that vision, stay ahead of trends, and put entrepreneurs first. (Myrto’s firm invests in seed-stage machine intelligence and data technology startups, and all but one of its 16 investments to date have been made in Boston-area companies, he says.)
“At the end of the day, every VC firm is only as good as their entrepreneurs and their investments,” Myrto says.
Indeed, Founder Collective’s Paley says one of the keys for the new funds will be to stick to their stated missions and truly support entrepreneurs. “There are a lot of reasons VCs compromise on their model over time. I hope these VCs won’t,” Paley says.
He also cautions the new venture funds to “stay disciplined” and “resist the urge” to raise more capital than they need to invest in early-stage companies, which he argues can lead to decisions that end up hurting entrepreneurs. Founder Collective’s debut fund was $40 million. It went bigger on its second fund—about $75 million—but kept the third one roughly the same size as its predecessor.
“There’s always incentive for VCs to raise bigger funds if they can,” Paley says. But “there’s a whole narrative of why it’s terrific that I don’t think bears out in reality. … Let’s not repeat the mistakes of the past.”
That’s a familiar refrain if you talk to the younger generation of VCs. And leaders of the new funds certainly have ideas for shaping the future of venture investing in Boston.
Hyperplane’s Myrto says it’s important “to be more inclusive, risk-taking, and take bigger bets” on entrepreneurs and their vision.
And part of Glasswing Ventures’ approach, Seseri says, involves giving fast, candid feedback to entrepreneurs pitching her firm, which focuses on companies in artificial intelligence and cybersecurity.
“We’re going to do it right,” she says of Glasswing. “It’s about building a platform that’s not stodgy.”
Xconomy’s Greg Huang contributed to this report.
Slideshow photo “Money!” by Flickr user Tracy O used under Creative Commons 2.0 and 4.0 licenses. Photo cropped to fit Xconomy publishing system standards.
