Venture Vitality
Venture-backed companies, which generate thousands of new jobs through innovation and entrepreneurship, are fundamental to the economic growth and prosperity of New England.
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| Paul Margolis, Partner, Longworth Venture Partners |
At a time when the nation’s economy is on tenterhooks, the US$18.6 billion invested by venture capital firms over the last five years in New England-based companies is providing important economic support for the region. In the first half of 2008 alone, 232 New England companies received more than $1.8 billion in funding — a significant vote of confidence in the talent pool and innovative products and services being developed locally in such growth sectors as information technology, green technology and biotech.
New England venture-backed companies — second only to Silicon Valley in terms of the amount of venture capital invested — employ more than 640,000 people and contribute significantly to the region’s economic and tax base.
The talent and innovative research emerging from our universities, colleges and teaching hospitals are two factors that make our region such fertile ground for start-ups and entrepreneurial companies. Venture capital firms like Longworth and established technology companies such as Microsoft also play important roles in supporting and nurturing local start-ups.
Consider Marathon Technologies, a Littleton, Mass.-based company in which Longworth invested in 2004. Marathon develops software that reduces the downtime on mission-critical computer servers to just a few minutes a year. Microsoft works closely with Marathon on the development and sale of its products, which are based on the Windows Server platform. Strong worldwide demand for Marathon’s software has been driving its growth, with staffing up 50 percent from last year.
Microsoft also works closely with venture capital firms such as ours to connect entrepreneurs and start-ups with potential investors, and it helps companies in the region introduce new technology, build partnerships and enter new markets. The Microsoft Startup Accelerator Program helps high-potential software start-ups, like Concord-based Memento Inc. and Cambridge-based marketing application pioneer Hubspot, advance their software development and marketing efforts.
As a local venture capital firm, we work closely with Microsoft to structure partnerships that help our companies get to the next level. A number of local companies in recent years have seen their technologies gain broad acceptance following their inclusion in the Microsoft family, including Groove Networks, a developer of collaboration software, and Longworth-funded Softricity Inc., now known as Microsoft Application Virtualization, which helps companies better manage their Windows desktop applications. Such acquisitions have helped to expand Microsoft’s employment in the region to nearly 1,000 people, quadruple the number in 2004.
Microsoft’s acquisitions, as well as its recent establishment of a new campus in Cambridge — home to Microsoft Research New England, an interdisciplinary research lab; Microsoft Startup Labs, which develops prototype products and services; and the Microsoft Application Virtualization team — reflect the company’s recognition of and commitment to the Greater Boston area as a leading source of innovation.
