Surely you remember that scene from “The Social Network” when Justin Timberlake’s Sean Parker delivers that now-infamous line to Jesse Eisenberg’s Mark Zuckerberg about how much cooler a billion dollars is than a million? Well how do you think the Boston area investors who turned down Zuckerberg’s requests for cash down must feel about losing out on those billions? They’re still kicking themselves actually, and seem to be drifting through life desperately hoping that they can lure the next big fish to plop into their boats, after they tossed the last one back into the water.
Boston venture capitalists declined to fund the founder of Facebook, the world’s most-popular social networking service, when he sought money to expand his startup in 2004. Zuckerberg’s move that year to Palo Alto, California, from his Harvard University dorm was a wakeup call for New England firms, which have lost market share to Silicon Valley and New York in the past seven years, says Michael Greeley, a general partner at Flybridge Capital Partners.
“There was a little bit of shock that we missed it, as a community,” Greeley, a board member of the National Venture Capital Association, said in an interview. Since then, Boston “really rallied around ‘how do you let these kids know that the state is open for business and a great place to start companies?’ Sort of a post-Facebook echo boom effect. Zuckerberg should never have left.”
Part of the reason Facebook didn’t find funding in Boston, and that area firms missed out on the social networking boom, is because many didn’t grasp its significance, said Howard Anderson, 66, a senior lecturer at the MIT Sloan School of Management and co-founder of Battery Ventures. The average angel investor in Boston is about 55 years old. In California, it’s 32, he said.
“It became a generational issue. You couldn’t really understand social networking here,” he said. “To understand things like Facebook, you have to be 19 to 24 years old. If you’re 56, you don’t quite get it.”
As the Atlantic Wire points out, Eduardo Saverin’s initial $1000 investment has resulted in billions in returns, as has Peter Thiel’s $500,000 investment. I like to imagine Saverin and Thiel as the child in the video below, with the old, Boston-area VC’s who passed on Facebook being the cat…
I want more like this!
Follow us on Facebook and get the latest before everyone else.