Local cities are tops at attracting VC
Westboro is attractive for a lot of reasons.
It's a quaint, old New England town within easy driving distance of Boston. It has lots of greenery and ponds and pretty pre-Revolutionary buildings.
Westboro also has a reputation for being development and business friendly.
And apparently, it's the people who live in Westboro that are starting businesses, or going to work for start-ups. And they're sucking in venture capital at a staggering rate.
Secondary cities
In a recent report from the Federal Reserve Bank of Boston, Westboro is ranked as the third highest performing "secondary city" in the U.S. for bringing in venture capital.
The report characterizes a secondary city as one outside a major metropolitan area. It's no surprise that the highest performing secondary cities are around the highest performing primary cities like Boston, Cambridge, Los Angeles and Silicon Valley.
Westboro was ranked behind only Boulder, Colo., and Salt Lake City, Utah.
Southboro wasn't far behind. It ranked no. 7.
So, what puts Westboro and Southboro near the top of the list?
Apparently, Westboro the "secondary city" is full of science and IT types who are looking for a "secondary career."
"It being attractive to venture capital is really a secondary effect," said Peter Shannon, an associate with Atlas Venture in Boston. "The real dynamic is being attractive to start-up companies" that need venture funding to get off the ground.
Of the top 25 venture capital deals in central Massachusetts in 2005, six involved companies in Westboro and Southboro: Sepaton Inc., Protonex Technology Corp., Cloverleaf Communications and True Advantage Inc. of Southboro; and ExaGrid Systems Inc. and Optasite Inc. of Westboro.
Skill set
"Downtown Boston and Cambridge have a certain type of skill set, and a certain type of dynamic," Shannon said. But outside Boston, "there's an older demographic, and it brings a different set of skills, and a different background in precision manufacturing, life sciences and IT," he said. "The secondary cities are very fertile recruiting ground for the type of talent those companies seek."
Companies like Protonex Technology Corp., a portable fuel cell developer in Southboro, "depend upon a basis of precision manufacturing that professionals in mid-career can take from their background and really contribute," Shannon said.
The folks who started Protonex seven years ago chose Southboro because they lived very nearby.
By contrast, venture funded start-ups in Cambridge tend to focus on cutting edge computer science, and tend to hire people straight out of college.
Main attraction
Shannon said towns can help attract those potential start-up employees, or even the folks who do the starting-up themselves.
Reasonable tax rates, decent infrastructure, "or just aesthetically," Shannon said, a town can make itself attractive.
According to Jim Eisenstein, chairman and CEO of Optasite Inc. in Westboro, Westboro offered convenience for employees, and the company's Research Drive space was being offered at a very attractive 11,000-square-foot sublease rate.
Optasite moved to Westboro from the Sovereign Tower in Worcester two years ago. The company owns cell towers and leases them to wireless telephone carriers, broadcasters, utility companies and government agencies.
"We were interested in this area because we are right on Route 9, and within a half-mile of (Interstate) 495, which itself is only a mile from the Mass Pike," Eisenstein said.
The company's primary investors are spread out around the eastern part of the country. That "makes it a little more difficult to have meetings at our office, and we don't have a large number of customers who come to our office," but Westboro is very convenient for the company's 23 employees.
"Everybody has to travel a little bit to get here, but it's very accessible," Eisenstein said.
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