Putting the Venture Back in Venture Capital

I attended the “Exploring Regional Venture Capital Business Models” yesterday at Boston University, the inaugural event created by Vinit Nijhawan, an entrepreneur-in-residence at BU and chairman of TiE-Boston.

As first time events go, this was a winner. Next year will be even bigger I predict. The premise was to showcase/discuss the differences between venture capital in Boston and Silicon Valley.

Paul Maeder of Highland Capital Partners was the in-person keynote speaker, with Kanwal Rekhi of Inventus Capital Partners hooked in by phone. Paul gave a thoughtful presentation on the differences — pointing out the challenges of doing business here, particularly how non-compete agreements in Massachusetts are major inhibitors to startups. California doesn’t have them! He also discussed the importance of the linkage between academia and startups, arguing that Stanford clearly has the edge over Harvard. He also had a great analysis on IPOs, capital raised, etc. that was “population adjusted.” In that light, Route 128 is holding its own versus the Valley.

Three panel discussions with great audience interaction followed on: Cleantech, Life Sciences and Technology. The consensus was that Cleantech and Life Sciences have huge upside and that Technology will do just fine.

In all the discussions on East versus West what I found missing was the big difference I observe in how different the VC community views talent risk. Specifically, if you “screw up” in Boston, you get put in the penalty box and need to find a career “do–over.” If you “screw up” in the Valley, you get asked what you learned and then are given another chance! Maeder summed it up well when we talked after his presentation. In Boston, CEO candidates are asked “What have you done”? In the Valley, CEO candidates are asked “What can you do”?

Another unanswered question related to the average age of startup CEO talent in Boston versus the Valley. My bet is they are younger on the left coast by 10 years! We need more venture in venture capital.