It is becoming a big deal in the Boston ecosystem when another VC decides to leave “Mount Money” aka Winter Street in Waltham for trendier digs in Cambridge. Scott Kirsner has a recent post on ATV preparing to move to Cambridge to be closer to the startup action.
I don’t think it’s a big deal if the remaining venture capitalists in Waltham stay there.
Boston/Cambridge doesn’t need more venture capitalists downtown. What is one of the biggest problems for startups trying to operate on the Red Line? Rent. It’s crazy expensive to find decent offices in Cambridge. Who doesn’t mind paying too much for rent? VCs and their service providers like accounting firms and lawyers. There is a really limited amount of space in Cambridge. We don’t need it taken up by venture capitalists. Startups will have to move to the burbs if rents continue to climb.
Having the local startups clustered along the Red Line is really important. A huge amount of knowledge sharing happens due to this proximity. For example, my CTO gets together with other CTOs at least once a month. I get together in the evenings with other startup folks pretty regularly. This wouldn’t happen if everyone was out in the burbs; or at least would not be as easy for startupers who live in the city (note that most senior VCs tend to live in the suburbs).
Scott highlights a very cool story about how Zuckerberg had to get a cab to get out to see Battery Ventures when they were considering raising capital. How do you think Zuckerberg got to the VCs on Sand Hill Road in Palo Alto? It’s not anywhere near public transportation. Getting there is a total pain in the ass if you live in the city, unless you live along 280 (I know because I did that commute for almost three years.) In fact, Sand Hill is a lot like Mount Money, with the VCs in their own little world, surrounded by investment banks, law firms, etc. There are a few startups on the street, but it’s really expensive. (Stanford is really close, which is a major advantage.)
Sand Hill has another advantage, in that it’s in the geographic center of the startup scene in the Bay Area, in between San Francisco and San Jose. I guess Waltham does NOT have that going for it. But being active in the startup community still requires the California VCs to get out of their offices and visit with startups and attend events. Boston area VCs can achieve the same thing if they get out and about and attend local startup events. If Mount Money VCs feel cut off from the action, I bet it has less to do with their geographic location and more to do with their attitude. You see a few of the same VC faces at most of the “cool” events, and there are some venture capitalists who make an effort to speak various startup panels. Instead of encouraging Waltham VCs to move to the city we should be encouraging them to get out of their offices more often.
