Boston startups stay close to home for seed investments


Most young technology companies in the Boston area that raise seed rounds of funding have local investors involved in the round — nearly 70 percent of them, in fact, according to new data from CB Insights.

It suggests Massachusetts startups are not suffering from a lack of local early-stage investor support, CB Insights said in a blog post.

The finding is based on seed-round investment data for 2010 to 2013 — a total of 227 deals, of which 154 had Massachusetts-based investors taking part.

It also dovetails with our report from March that showed Massachusetts venture capital firms are keeping more of their deal-making local.

Other interesting findings from the CB Insights data:

• The top seed investors in Boston during 2010-2013 by number of deals were CommonAngels (37 deals), Atlas Venture (30, according to CB Insights / 64, according to the firm — see update below), LaunchCapital (21), Boston Harbor Angels (13), and Boston Seed Capital (13).

• They were followed by Google Ventures (12), General Catalyst Partners (12), NextView Ventures (11), 500 Startups (11), Clean Energy Venture Group (10), and Polaris Partners (10).

• Silicon Valley investors took part in one-fourth of the Boston seed deals from 2010-2013, while New York-based investors participated in 14 percent of the deals.

• Internet startups led the way on Boston seed deals, with 52 percent of the deals between 2012-2013. That was down from 55 percent in 2010-2011.

Whether Boston startups enjoy a healthy amount of support from local investors once they are ready for Series A funding, that’s up for debate. According to the VCs at Kepha Partners, at least, there are only about 15 check writers left in Boston for tech Series A rounds.

Update: Atlas Venture sent over its own figures for its seed investing activity, showing that the Cambridge-based firm did a total of 64 seed deals with Massachusetts-based companies from 2010-2013. The breakdown by year:

  • 2013 – 30
  • 2012 – 17
  • 2011 – 10
  • 2010 –  7

An Atlas spokesman also said the firm has done eight seed deals with Massachusetts-based companies so far in 2014.

Bean seeds germination in soil image via Shutterstock.

Kyle Alspach has worked in journalism in Massachusetts since 2005 and was one of the original staff writers at BetaBoston.
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