Young Venture Capitalists to Launch Social Networking Site for VCs

Posted by Bob Buderi on November 9th, 2007 filed in Uncategorized

Aiming to encourage collaborations that could fuel more effective creation of new businesses in the greater Boston region and beyond, a group of young venture capitalists will gather tonight at the EMC Club in Fenway Park to kick off their new professional networking website.

VentureNetwork.VC, set to go live by Friday (Nov. 9) morning, is the offspring of the New England Venture Network, an eight-year-old professional association consisting mostly of some 500 young venture capitalists—typically associates, principals, and vice presidents (or anyone else who isn’t a general partner). The website will function somewhat like business-oriented social networking sites such as LinkedIn, but will be narrowly focused on the venture capital/private equity world and set up for members-only access. Once behind its walls, members will find sophisticated ways to interact with each other online, share deal ideas, access research reports and news, seek advice, and generally work together in new ways.

“We feel like the industry is ready for this,” says Joe Medved, an associate at SoftBank Capital in Newton, who will become one of two new co-chairs of NEVN almost as the site goes live. I met last week with Medved and three other core members of the group: Medved’s soon-to-be co-chair, Danny Klein, a senior associate in Vesbridge Partners’ Westboro office; outgoing co-chair David Safaii, a senior associate for Windspeed Ventures in Lexington; and Gavin Kim, an associate from Advanced Technology Ventures, in whose Waltham offices we convened.

These four VC up-and-comers see the site as a much-needed breath of fresh air for NEVN. More importantly, they also see it as a breath of fresh air for the, shall we say, somewhat insular New England venture community in general, which is also being invited to join in. More on that in a minute.

NEVN formed in 1999, but its membership has become less robust in recent years. Members connect well at the group’s various events. But, says Medved, “That communications stops or it slows down significantly until the next event.” Seeking ways to enhance communications and revitalize NEVN, the group’s steering committee hit on the website idea about a year and a half ago, shortly into the term of Safaii and Mike Hartmann, previously of Battery Ventures (now in business school). Safaii, who has overseen the idea since its inception but will focus on sponsorships and partnerships when his co-chair tenure ends, says that although the idea is on the surface aimed at revitalizing NEVN and helping advance members’ careers, the group also realized that “we’re doing entrepreneurs a disservice by not pushing deal flow around.”

What’s most fascinating to me, though, is the group’s observation that they are, in essence, representative of a new breed of New England venture capitalist that is generally much more open to collaboration and deal-sharing than their predecessors, including many of today’s reigning general partners. Often, they said, a VC might pass on a deal because it doesn’t fit his or her investing criteria (size, field, etc.). But even though the deal might still be good for someone else, they don’t share that information, or if they do, they share it very narrowly.

VentureNetwork.VC reflects a change in that thinking. “It’s a different model than the traditional VC model, where they’re making calls on deals purely by themselves or by their own purely proprietary network,” says Kim.

I didn’t get a chance to check out the live website, which was still under development when we spoke. But the group walked me through a presentation of how it is meant to work. The gist is that members will create personal profiles that will include not only their names, firms, and locations, but also such details as whether they’re in venture capital, private equity, or a limited partnership (investors in venture and private equity funds can join as well); the industries their firms focus on; their own investment specialties; and the type and size of round they prefer. “This way when people are trying to form syndicates around a deal, it’s easy for to them to identify colleagues who may focus on a niche,” says Safaii. Members can also add to—and search—a database of deal profiles. “You’re really able to leverage what’s in this entire environment,” Safaii says.

The site will also provide other offerings, such as a calendar for both NEVN-sponsored functions and community events, a research area that includes a monthly Q&A with an analyst, a jobs board, an advice blog, and a chat board to share ideas. Finally, notes Klein, there’ll be a survey widget that allows them to do things like compensation surveys, “which I think is also going to be very compelling.” (I’ll bet, and yes, members can respond anonymously.)

These are grand plans, of course, but will folks really share quality deals? The group acknowledged the possibility that members might pass on weaker contenders to keep up appearances but keep the good deals offline—but they don’t think that will happen. If a member gets known for only passing on lower-quality deals, it will come back to bite him or her, they say. Similarly, if someone gets a reputation as being a team player and enhancing the network, that will do wonders for his or her rep and career. “I want to make sure I throw a quality deal,” is how Medved sums up the motivation.

Some of the site will be publicly accessible—what the organization is about, why you should join, that kind of thing. But most of it will only be accessible to members. This will include not just NEVN members, but also other, more senior VCs in the region, as well as limited partners. In addition, the group is building the site so that its framework can be used by venture groups in other regions. Such groups aren’t interested in being subsumed into one giant organization, because they’ve spent years building their own brand and identity. But, says Klein, “they’re very eager to mirror our initiatives in their local communities.” Already the NEVN team has been talking to members of groups in California, Chicago, and New York, says Safaii. The idea is to eventually link parts of all their sites, allowing groups to view profiles and deals across regions.

“There’s just so much capital right now that needs to be placed to work,” says Safaii. “In general, venture capital needs to find a way to allocate those good deals more efficiently.” The group feels that everyone—VCs and entrepreneurs alike—will benefit from the new type of cooperation represented by VentureNetwork.VC. For up-and-coming venture capitalists, it’s a new way to build community, learn from each other, and find power in collaboration. And if the VCs can be more open about the deals they see, says Safaii, “Hopefully this will limit the number of dead ends that entrepreneurs reach.”

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