Did Boston VC’s let the the seed corn rot?

I was speaking with Adam Green the CEO of Grazr recently and we were talking about what happened to all the boomer software developers. Conjecture was they either made their money pre bubble burst or became disenchanted when there wasn’t much interesting going on 2001 to 2006. The conversation then turned towards the root cause of their disappearance.

With the VC’s in Boston taking a powder, the field became infertile and now is in need of some serious fertilization. Adam pointed out that while the Boston VC’s waited out the downturn, the ecosystem withered. We know that while nothing was going on here, there was still activity in Silicon Valley, ie… PayPal IPO 2002, Google IPO 2004, etc… The end result is that Boston is now playing catch up in the Web space. Another issue that has compounded the problem is that the continued activity in Web businesses out West has created a class of investors that does not exist here. A lot of companies are funded by angel investors that are seasoned Web entrepreneurs using significant amounts of cash to seed the next generation of up and comers. We don’t have the equivalent here.

So on the one hand you hear “we didn’t get burned when the bubble burst”, what that means is that we didn’t participate in a major field of innovation (actually turned down deals that went to SV) and now we don’t have a bull pen of founders to build companies in this space.

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