Big v. Small

One of the more interesting debates in the Boston VC world right now is whether fund sizes are getting too big.

(Remember the last time we had this debate…? It was the late 1990s, and Pets.com was delivering cartons of dog food across the country at negative margins. Those were the days…)

Battery Ventures, Bessemer, and General Catalyst have each raised big new funds in the $700 million - $1 billion range. At an event earlier this week called Future Forward, Castile Ventures partner Nina Saberi was questioning whether a fund can effectively do everything from early-stage deals to buy-outs, in geographies ranging from Silicon Valley to New York to Boston to India to Israel.

I’ve also been noticing the emergence of a whole new crop of smaller funds, in the sub-$250 million range, that are making the case that they can do earlier-stage deals, with more upside potential, much better than the big funds.

A few weeks ago, I had a chance to sit down with David Andonian, the founder of one of these new funds, DACE Ventures. David is the former COO of CMGI, the conglomerate that cranked out and funded Internet businesses in the late 1990s from its headquarters in Andover. He also spent time as an EIR at Cambridge-based Flagship Ventures. His new fund is in the $75 million range. A short video of our conversation is here.

I suspect this debate about big versus small will be part of the discussion at the MIT VC Conference later this month….