Updated, Jan. 8, 8:40 am—see below: Everyone knows that when it comes to Internet investing, New England VCs are low flyers compared to their high-flying Silicon Valley counterparts—and a lot of folks around here are always asking why Boston investors can’t be more like the Web venture gurus out west.
Well, turns out New England investors might have made up more ground than people thought, and it isn’t necessarily good news: an impressive five New England venture companies made Silicon Alley Insider’s list of the nation’s top 20 VC firms most exposed to potentially shaky Web 2.0 investments given the current rough environment for such companies. Spark Capital of Boston, ranked No. 12 overall, topped area firms. Also on the list were Waltham, MA’s Greylock Partners (No. 16), Oak Investment Partners of Westport, CT (No. 17); Highland Capital Partners (No. 19) of Lexington, MA; and Waltham-based Polaris Venture Partners (No. 20).
Silicon Alley Insider defines Web 2.0 startups “as advertising-supported startups founded after Google’s IPO.” That would be after August 19, 2004.
The Alley team based their list on data (I have some problem with the data—see below) from the VC Experts Key Investment Trends database. So here’s the rundown of New England firms on the list, with how much they reportedly invested in Web 2.0 companies, along with the names of their top Web 2.0 portfolio investments. (Silicon Valley firm DCM topped the list, by the way.)
Spark Capital — $25 million
Biosocia, Buzzwire,
Tumblr, Next New Networks, Twitter
Greylock Partners — $23 million
Red Bend Software (previously known as Emony), Social Gaming Network, WildTangent, Cape Clear Software, Apptio, Facebook
Oak Investment Partners — $23 million
Rearden Commerce (previously called Talaris)
Polaris Venture Partners — $23 million
ChipIn, JibJab Media, Modelinia, Plinky, VKernel
Highland Capital Partners — $21 million
Going (formerly called HeyLetsGo), Metacafe
I’m not sure how complete this list is. Only a quick read shows it certainly isn’t perfectly accurate, either. Polaris’ VKernel, for instance, isn’t a Web 2.0 company by any stretch of the imagination. It makes virtualization management apps that are downloadable, not Web-based. VKernel’s Series A round last year, co-led by Polaris and Hummer Winblad Venture Partners, totaled $4.6 million. So cutting VKernel from the list might just have bumped Polaris out of the top 20—it would be close.
Update: Jon Flint, a Polaris co-founder and managing general partner, has just pointed out that JibJab doesn’t qualify as a Web 2.0 company by SAI’s definition, either: “JibJab does not have an advertiser supported business model. It is an eCommerce company selling electronic greeting cards like “ELFyourself”…a recession resistant business,” Flint wrote in an e-mail.
I also have to wonder where Cambridge, MA-based General Catalyst might fit in. It has big investments in a lot of Web 2.0-type companies that live at least partly on advertising: Eons and Roost come right to mind. But in any case, that’s the list. For better or worse—I actually think better, since Web 2.0 is not exactly going to go away, and many of the firms listed above will likely be big winners—New England VCs seem to be holding their own.
