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Bain Capital Ventures talks about decision to set up shop in Palo Alto

Posted by Scott Kirsner  November 2, 2011 10:39 AM

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The two big trends of the past two years in the Massachusetts venture capital scene have been:
1. Suburban firms migrating into the city (Highland Capital Partners, Charles River Ventures, Bessemer, ATV, etc.)

2. Boston-area VCs setting up outposts in the Bay area (Highland, Polaris Venture Partners, General Catalyst, Third Rock Ventures, etc.)

Bain Capital Ventures is joining that second movement, with a new six-person office in Palo Alto, near that city's main drag, University Avenue.

"I'm the only partner here for now," managing director Ajay Agarwal tells me, "but we're looking to add some others over time." Agarwal, a Stanford alum, moved west in August. While he was still based in Bain's Copley Square office, he made investments in start-ups such as Kiva Systems, Skyhook Wireless, Memento, and Rave Mobile Safety.

"We've been investing in California companies for the last ten years, but it has been by getting on planes," Agarwal explains. "That limits you to making Series B investments and later. When we think about early-stage geographies, Boston and New York are exciting, and we have coverage there, but we had no coverage in California, which is also exciting. It's not a statement that we think the east coast is not a great geography anymore. It's an 'and' statement, not an 'or.'"

Agarwal, who earlier in his career was an executive at Trilogy in Austin, says, "The Silicon Valley community, for better or worse, is all tech, all the time. It's in the water here. Whether you like it or not, you can't get away from it."

The water must be having an effect: shortly after moving west, Agarwal decided to start a blog.

PE Hub reported earlier this year that Bain Capital Ventures was planning to open a Silicon Valley office, but Bain didn't confirm the decision then. The firm, an affiliate of the Bain Capital private equity business, raised a $525 million investment fund last year.

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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