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Entrepreneurs sound off in new survey about VCs and the Boston ecosystem

Posted by Scott Kirsner  October 5, 2012 10:01 AM

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Entrepreneurs often get a chance to hear the opinions of venture capitalists -- especially when they're hunting for money.

So it was an interesting role reversal when the New England Venture Capital Association commissioned a survey over the summer to find out what entrepreneurs think of them, and the current state of Boston's startup ecosystem.

"It was very much an experiment," says C.A. Webb, right, the Cambridge-based organization's executive director. "But we wanted to establish a baseline, so that we can repeat the survey every year." Webb shared the results of the survey this morning with NEVCA members in a conference call.

The group surveyed 111 entrepreneurs who said they were either planning to raise capital, in the process of doing so, or had done so within the last two years. The respondents came from a mix of industries.

Some of their opinions were surprising, but others can be heard any time you convene two entrepreneurs near an open bar. Among the results:

• Respondents said that for starting companies in biotech, healthcare, robotics, and educational technology, Boston is a better location than Silicon Valley or New York. (89 percent said Boston is tops in biotech and healthcare, compared to just 10 percent who said the Valley and 1 percent who said New York.) But when it comes to consumer-facing products, Boston is seen as a far weaker base for companies than the Valley or Manhattan. (Boston was ranked tops by just 1 percent there.) Respondents also said that they perceived the Valley as a slightly better place than Boston for storage, "big data," and cleantech startups.

• "Access to talent" was rated as the biggest strength of Boston's startup scene; "conservative VCs and lack of early-stage funding" were seen as the biggest weaknesses.

• Silicon Valley was rated higher than Boston on numerous dimensions relevant to entrepreneurs, like access to talent, access to peers for advice, number of angel investors and VCs, and access to mentorship from established companies. Where did Boston prevail? On access to an academic community, access to office space, and overall lifestyle and livability. The one category where New York beat both Boston and Silicon Valley was, of course, "social scene, nightlife, and culture."

• Where do entrepreneurs get their advice on fundraising? Forty-five percent of respondents said it comes from peers, 19 percent from prior investors, and 18 percent from "surveys, published reports, and blogs." (Go blogs!) Fifty-seven percent of respondents said they felt that Series A (the first significant venture capital round) is the most accessible kind of financing in Boston; just 35 percent said that seed funding is.

• Respondents were asked to complete the following sentence: "Changes I would like to see in Boston’s startup community include: _____________." They filled in the blank with "more press coverage," "getting the T to stay open later," "cheaper residential options," and more "open-minded" VCs. My favorite quote: "Less whining, more winning!"

"I was delighted to see how many people thought the community was thriving — that's great," says Jamie Goldstein, an investor at North Bridge Venture Partners in Waltham who serves as president of the NEVCA. "And 82 percent felt that VCs here are supportive of entrepreneurs — that was better than I'd feared."

Goldstein and Webb say the results of the survey will help shape NEVCA initiatives and programs in the future. That'll likely include doing more to attract and retain "emerging talent," including recent college graduates, and also trumpeting the successes of New England companies, Webb says, especially to audiences outside of the region. 

Here's one chart from the report:

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About Scott Kirsner

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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