It wasn’t just the leaves that began to fall in the Bay State in October: last month also saw a big falloff in venture deal-making. After a (relatively) spectacular September in which $228 million was pumped into 25 Massachusetts funding deals, investors only managed to shell out $169 million in 19 deals in October. It was the lowest monthly total in both deals and dollars since we began tracking the monthly totals last June ($145 million, 17 deals).

Such a big falloff might make you wonder whether thoughts of recovery are a bit premature. But also consider that at least 14 of the 19 deals were early stage—seed, Series A, or Series B. (The figure could be higher, as the stage of financing could not be determined for two deals, both of which were under $5 million, which is indicative of an earlier stage round). That compared with just 12 of 25 (also with two unspecified) in September.

The figures come courtesy of ChubbyBrain, a New York-based information services company developing tools for investors, startups, and aspiring entrepreneurs.

Three big biotech deals led the way in October. Flexion Therapeutics of Woburn, which is out to make drug development faster and less costly, took in $33 million in a Series A round. It was followed closely by Cambridge-based Epizyme, which raised $32 million in Series B funding as it seeks to develop drugs based on insights from the field of epigenetics to fight cancer and other diseases. Finally, Virdante Pharmaceuticals, also of Cambridge, garnered $30 million for its Series A round to support development of anti-inflammatory drugs.

The biggest non-biotech deal of the month was a $16 million C round for marketing technology firm HubSpot, another Cambridge denizen. Its co-founder and CTO, Dharmesh Shah, just won the Mass Technology Leadership Council’s award for Innovator of the Year. Looks like he and CEO and fellow co-founder Brian Halligan might be up for Internet fundraiser of the year as well.

Read on for a table of all the October venture deals in Massachusetts.

Other highlights from the October data:

—Healthcare was actually a bright spot last month, compared with September. Deal numbers were up slightly (7 vs. 6), but the $114.3 million raised easily topped the $98.8 million brought in during the previous month

—The Internet sector (9 deals, same as last month) led the way in deal numbers for the second straight month. But the total raised was down by roughly a third, from $62.2 million to $41.6 million.

—There were no energy or cleantech deals in the month. In fact, there have only been two energy venture deals in Massachusetts since we started doing the monthly tallies in June.

—General Catalyst Partners, which invested in HubSpot and Visible Measures, both C rounds, was the only venture firm I spotted in more than one deal in October.

October 2009 MA Venture Investments

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It was a newsroom holiday today at Xconomy, but Hewlett-Packard didn’t get the memo that we were off: the California company founded by Bill Hewlett and Dave Packard announced today that it would acquire 3Com for $2.7 billion.

You can read all about the acquisition deal at a host of news outlets, including the New York Times. But meanwhile, we have an e-mail to share from the 3Com founder who is a fixture of the New England innovation scene: Bob Metcalfe, now a general partner at Polaris Venture Partners in Waltham, MA.

Metcalfe (the photo of him above is from atop Mt. Kilimanjaro earlier this year), who founded Marlborough, MA-based 3Com in 1979, is known for his humor and wit, which comes through in his e-mail—so business development folks at his deeply loved alma mater be warned.

Here’s his message (with a few Blackberry typos corrected):

Comments on the news:

After leaving Xerox Parc, I founded 3Com on June 4, 1979. We were a com before the dots, and I am what in Silicon Valley they call “old money.”

3Com’s goal was computer communication compatibility — 3Com — and our first three chosen standards, then controversial, were Ethernet, TCP/IP, and Unix. 3Com shipped the first commercial version of TCP/IP for Unix in 1980 and the first PC Ethernet in 1982.

We went three for three.

I was just in Marlborough to celebrate 3Com’s recent 30th anniversary. Exhilarating.

I retired from 3Com in 1990 and sold all my shares soon thereafter to create a blind trust for my 1990s career in high-tech punditry. Today I own a few shares for old times sake, so I won’t be seeing much of the $2.7B. Please tell this to MIT’s resource development office.

3Com grew in the shadow of HP, always asking what would Bill and Dave do. The joke was that 3Com was the best of Xerox technology and HP marketing.

Best wishes to 3Com and HP,

/Bob Metcalfe

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It was big news here in New England last week when Don Dodge announced on his blog that he had been laid off from Microsoft as part of some 800 layoffs at the software powerhouse. Dodge had been a regular on the innovation scene here in New England—and around the world, really—and was known as Microsoft’s enthusiastic ambassador to the startup world.

In his initial post about being laid off, Dodge, who was based in New England with the formal title of director of business development for the Emerging Business Team, said being laid off was “a total surprise” and that his bosses “offered no explanation.” But he kept his comments at a high level.

Since being laid off, Dodge has reported that he has picked up more than 1,500 Twitter followers. But other than that, I haven’t spotted much from him. That all changed today. Dodge not only posted (turns out he posted it yesterday, but I didn’t see it until today) a thoughtful piece on his blog about leaving Microsoft, he did a roughly 11-minute videotaped “exit interview” with TechCrunch.

To me, the more interesting of the two was Dodge’s own heartfelt post, called “Pay It Forward, give and you shall Receive.” He talks about the many friends, old and new, who reached out, the job offers the poured in, and more. Some excerpts:

“I want to publicly say thank you to all my friends. You know who your friends are when times are tough. I heard from hundreds of friends last week and it meant a lot to me. Social media has created a whole new set of “friends” who know a lot about you and care about you, even though you may have never met in person. Hundreds of these friends took the time to write to me. Over 400 emails on my new Gmail account. There were also hundreds of comments on blogs and news sites that carried the story of my separation from Microsoft. It was almost like I had died, but got to read my obituary and hear the tributes. It was surreal, uplifting, humbling, and very gratifying. Thank you. I had no idea…really.”

“Then of course there were the job offers or offers to discuss opportunities. They came from everywhere. The big tech companies, the biggest names in the business, were very quick to reach out, within hours of the news. I was pleasantly surprised. VC firms wanted to talk about opportunities at their firms and within their portfolio companies. Startup founders were also quick to act. Thank you all. I appreciate every single one of you.”

TechCrunch has done nothing to disguise its opinion of Microsoft’s decision; founder Michael Arrington, who conducted the “exit interview,” has called it a “huge mistake.” You can find TechCrunch’s post here. I’ve embedded the video below.

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When they write the book on great libraries of the world, a few legendary names will come to mind: Alexandria; Pergamum (the city where papyrus is said to have been invented) in what is now Turkey; the British Library; the New York Public Library; and of course, the U.S. Library of Congress. The new public library here in Cambridge, MA, will not be on anyone’s list. But I have been driving down Broadway past its construction site for several years now, watching as it went from a hole in the ground to a beautiful ultra-modern structure that opened Sunday afternoon. And the same thought passed through my mind each and every day: A great library for a great innovation city.

So you can bet I was there Sunday for the official opening (although I waited until halftime of the Patriots game)—and joined hundreds of others who had descended on the place. Everyone was oozing excitement. And although the checkout line stretched from the spectacular lobby halfway up the stairs to the second floor—it turns out some 1,750 visitors passed through in the three hours the library was open Sunday–no one was complaining. The director, Susan Flannery, couldn’t be happier. “Yesterday, in three hours, we checked out over 4,000 items,” she told me on Monday. “We had a ton of high school kids here today.”

I know writing about a public library is a stretch for biz-tech news blog like Xconomy. But at the same time, education and learning is the source of innovation—and I was personally so inspired by the library that I couldn’t help writing about it. Given the way it was drawing students, especially, I even asked Flannery if we could expect a renaissance of learning and innovation here in Cambridge as a result of the library. Cambridge has always been rich in learning, she responded, not quite taking the bait. “We’re just making it more appealing and easier to do.”

But there are a few things on the technology front worth mentioning that at least go toward that end. Free public Wi-Fi is available throughout the building. The library has nearly 100 publicly accessible computers (a few are dedicated to online catalogs, but the vast majority are unrestricted). About 20 are in a dedicated computer room, another dozen in the teen room, 10 or so in the children’s room, 8 in the research room, and the rest spaced throughout the facility (sadly, they are all Windows machines—no Macs!). There is also an extensive digital media catalog for downloading e-books and audiobooks—but that’s part of the overall Minuteman Library Network that serves 42 libraries in the Metrowest region of Massachusetts and is not special to the new Cambridge library. Flannery says the library has a grant that will allow it to buy some handheld electronic readers (a la Kindle) that may be available for loan, and that it also plans to add Nintendo Wiis to the teen room and purchase a couple of interactive white boards for the general library that can be used for everything from watching movies to collaborating on projects through their touch interface.

4,000 items were checked out in 3 hours.

But back to my tour. There are three floors above ground and two below—and the modern new structure connects to the old main library, which itself has been completely redone. (Cambridge Rindge and Latin School, the public high school, is the next building down—and it is fantastic that this great library is within such easy reach for students. I can happily report that both my kids, who attend Rindge and Latin, can’t wait to go and study there—and if their peers feel the same, the project might have already paid for itself.) I roamed all over the building: the only place I couldn’t go was the lowest level, which houses meeting rooms and a 230-seat auditorium and was closed off for the day. “It’s fabulously gorgeous,” says Flannery of hte auditorium. She says that in addition to state-of-the-art audio/visual system, the space is equipped with an audio enhancement system for the hearing impaired.

The total cost of the project was $90 million, Flannery says (though that included other, non-library work done in conjunction with the renovation). The state contributed a $10 million grant, and the rest was paid for by the city of Cambridge, she says. The lead architects of this great library are William Rawn Associates of Boston, with Ann Beha Architects, also of Boston, as the associate architect. With no floor or carpet glues or other volatile organic compounds, a lighting system that shuts off when there is enough light from the sun, and bamboo flooring in the children’s room, it will be LEED certified as a green building. And here is the landing page for all sorts of other information about the library.

But I didn’t really interview anyone in depth for this story. I just went in, scribbled notes, and took a bunch of pictures. And I reveled. Below are my photos (the first two were taken earlier this fall) and some impressions: the captions come above the images. Click on any image to make it larger.

The long view from Broadway.

Old library meets the new. A glass hallway and courtyard connects them.

Opening day, Sunday, November 8, 2009.

In we go. The place was ablur with action. Really—it isn’t the photo.

To continue viewing photos, go to the next page. …Next Page »

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We’ve noticed a slowing of venture investment in cleantech and other aspects of energy here in New England. But put any green investment pessimism on hold this week—as today marks the start off what’s being touted as the third annual Clean Energy Week here in Massachusetts. In a week of charged-up presentations from Springfield to Boston, we’ve got networking, investor pitches, a “green tie” gala, and LOTS of startups. In fact, I’ve counted 52 startup pitches across the week, and that’s not counting the 10 finalists in the Ignite Clean Energy Competition, who will be at the State House in Boston on Tuesday, and any others I have missed.

It would be hard for anyone to make all these events. But below are some highlights, and you can find a more complete overview here.

Monday (today)

—A short walk from Xconomy’s offices at the Hotel Marlowe in Cambridge, MA, is the sole event of the day, the Clean Energy Applied Research Discovery Workshop put on by SETsquared’s Clean Energy Mission to Boston. SETsquared is a research collaboration between four British universities: Bath, Bristol, Southampton, and Surrey. (I can’t figure out from the website if the event is open to the public, so I’m guessing it isn’t. But Xconomy staffers and friends can often be seen after work in the Bambara restaurant bar in the Marlowe.)

Tuesday

The pace of events really picks up on Tuesday.

—Clean Energy Connections, an all-day career and business development conference in Springfield, MA.

—Boston Cleantech Venture Day. This event, which takes place at the Boston offices of Edwards Angell Palmer & Dodge, is put on by a coalition of various international chambers of commerce and business groups “to assist European Cleantech companies in exploring and taking advantage of opportunities in the US.” All told, some 17 European companies have come over to present at the conference, and the closing keynote speaker is Howard Berke, founder of Konarka Technologies.

—The highlight of the day will likely be the finals of the Ignite Clean Energy business plan competition put on by the MIT Enterprise Forum of Cambridge at the Massachusetts State House. You can find the business plan summaries of the 10 finalists who are vying for the $35,000 grand prize here. This event looks great, but it is sold out. Here’s what the website says about walk-ins: “If you choose to Walk-In we do not guarantee entrance into the event, will be based upon capacity of the room. Pre-Registered seats will be released at 12:50pm (20 minutes after presentations begin)…”

Wednesday

—University Research Briefing Day. This Massachusetts Technology Transfer Center event, held at MIT’s Tang Center, will feature faculty from Massachusetts institutions who will present their clean energy research. This is always a great event—and I hope to be able to make it.

—Green Tie Gala. This is the second year the New England Clean Energy Council has organized this event at the JFK Library & Museum. I don’t have a tux, but Wade does—and plans to be there. The keynoter is Congressman Ed Markey. The event is sold out, according to the registration page, even the $3,250 tables.

Thursday and Friday

—The week’s piece de resistance is the two-day Conference on Clean Energy organized by the Massachusetts Technology Transfer Center and the Massachusetts Hydrogen Coalition at the Hynes Convention Center. Keynoters include Steve Koonin, under secretary for science at the U.S. Department of Energy, Governor Deval Patrick, and Ian Bowles, the state’s energy czar. MTTC director Abi Barrow says 35 companies from a variety of energy sectors will present at the conference, including four foreign firms—one from Norway and four from Britain.  The Sunday Times of London was very excited about the four from Britain and wrote this piece. And you can find the speaker list and bios here.

Wade hosted a podcast in advance of this conference—as he puts it, “previewing some of the themes that will be featured prominently at the event, ranging from the state of energy investing to the role of stimulus funding for energy startups.” You can find the podcast here.

—Also starting on Thursday and concluding Friday is the 17th Annual U.S.-Canada Energy Conference at the Seaport Hotel in Boston. The theme of this year’s event is “North American Energy: Forging ahead in the current economic and environmental climate.”

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[Updated and corrected, see below---Also see end of story for news of Google announcement of Nov. 4] In May 2008, Google moved into colorful (hey, it’s Google) new offices in the heart of Kendall Square. Governor Deval Patrick played ping-pong at the grand opening with Google site director Steve Vinter. And since then, Google Cambridge has grown to some 200 people spread over four floors, and about evenly split between sales and engineering.

But while engineers at the local Googleplex are working on key infrastructure components such as BigTable and MapReduce and consumer-facing offerings like Google Books and Google Images, only one effort to date has been conceived, developed, and released entirely from here in Cambridge, MA: Google Friend Connect.

GFC is a social media tool that makes it extremely easy for website owners to add social features to their sites—without the need to learn programming. These features include gadgets or plug-ins that allow visitors to automatically import their personal profiles from Google, Yahoo, and other places without having to do it manually for each new site they want to join, as well as widgets for letting users rate and review things. Website owners simply select the features they want, fill out an extremely short (three-item) form, and the code is generated for them to cut and paste into their site. The idea is that such as easy tool will make sites more interactive and interesting, thereby helping site owners attract and retain their users. (We’ll get to Google’s motives later on).

[Editor's note: the second sentence of this paragraph was amended to reflect the correct number of monthly GFC websites and users.] And it seems to be working. Since the public beta launch last December, Google Friend Connect has grown to some 8 million websites a month spread across what are estimated to be hundreds of millions of users. Google isn’t exactly sure how big GFC has gotten. “It’s big,” though, is how tech lead manager Sami Shalabi sums things up. And there is apparently more news coming. Google says it is planning a big announcement in the near future about GFC.

Besides being the only Google product entirely born, bred, and weaned here in Cambridge, I found the GFC story interesting because it illustrates how entrepreneurship can flourish inside a big company (yes, Google is officially a big company). A small team was allowed to run with a product idea, much like a boot-strapped startup might do—but when the project showed promise, the corporation stepped in with marketing clout virtually impossible to match in the startup world. If done right, that kind of one-two (startup-giant) punch can make up for the overall bureaucratic sluggishness that often permeates big companies (and yes, Google has been known to exhibit some big company bureaucratic traits).

The story of Google Friend Connect begins, fittingly enough, with two friends. Shalabi and Mussie Shore met each other in 1998 at Iris Associates, an IBM subsidiary where they worked on a suite of Lotus products, most notably Lotus Quickplace and LotusNotes. I visited the pair on the sixth floor of Google Cambridge, where their 11-person team (counting them) occupies a funky, open workspace in a prime corner area. We then retreated to a “huddle room” (what non-Googlers call a conference room) named Magic Hat. It turns out that all the huddle rooms on the sixth floor are named after beers or breweries, which is cool with the GFC crew because three of the team are microbrewers. (Click on the team image to enlarge it and see a full caption.)

In 2006, Shalabi and Shore got the entrepreneurial bug and, together with Martin Fahey, co-founded Zingku, a social networking startup that made it easier to share things like photos, polls, and invitations via instant messages, e-mail, the Web, and (especially) cell phones. You know who purchased Zingku in fall 2007 (for an undisclosed sum). And it was just a few months after …Next Page »

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There’s a big argument over whether venture capitalists and even angel investors are doing as many early stage or small deals these days. The general sentiment is that no, they aren’t. Since we began our monthly roundup of Massachusetts venture deals back in June, however, we’ve argued that the data doesn’t support that view: virtually every month, the number of seed and Series A rounds has topped the number of later-round financings, and often by a wide margin.

Now comes what could be another blow to the small-deal naysayers: new data on the extremely small deals—those between $100,000 and $1 million—that typically aren’t reported in financing tabulations. As my colleague Greg Huang, Xconomy’s Seattle editor, wrote in his own look at small deals in the Northwest earlier this week: “Though small in size, these investments need to be included along with the bigger deals that get more press, if you want a more complete picture of the funding landscape in the innovation community.”

It turns out there were 10 of these “under the radar” high-tech deals—7 in Massachusetts, 2 in Connecticut, and 1 in New Hampshire (see table below)—in New England in September, according to data supplied by our partner ChubbyBrain, a New York-based information services company that tracks VC, angel, and other investments in private companies.

Six of the 10 deals involved equity investments; the remaining four were debt financings. And they spanned a wide range of fields from medical displays to tracking tags to new approaches to education. To me, the most interesting was OmniGuide, a Cambridge, MA, company we’ve written about before that took in $249,999 (you gotta wonder why that figure). OmniGuide, which raised $1.8 million in May, $25 million last year, and some $50 million before that (it’s a long story, go here), makes highly precise optical laser scalpels; its chairman is Analog Devices founder Ray Stata, and the CEO is MIT materials scientist Yoel Fink.

As the parent of two teenagers, I was also highly interested in the Westonian Group, which raised $170,250. The Westonian Group doesn’t appear to have a website, but it is the company behind Abroad101, a website for sharing information about study abroad programs.

Here, then, are our 10 “under the radar” deals from September.

Carrot Medical (Waltham, MA)                 Equity           $635,000
Ultra-high-definition displays for medical images

SoundTag (Braintree, MA)                         Equity          $535,000
Tracking tags for priority shipments

TenMarks Education (Newton, MA)          Debt            $350,000
New approach to math, science, and English education for children

SpecPage (Attleboro, MA)                           Equity          $313,000
Product marketing information exchange for food service and janitorial industries

SeeClickFix (New Haven, CT)                    Debt              $265,000
Technology for reporting and tracking non-emergency issues via the Internet

OmniGuide (Cambridge, MA)                   Equity             $249,999
Designs and manufactures highly precise optical laser scalpels.

Validus DC Systems (Brookfield, CT)         Debt              $204,000
Direct current power infrastructure for data and telecom centers

Paneve (Florence, MA)                                 Debt               $175,000
Software and hardware to reduce the costs of delivery and display of video media content

Westonian Group (Weston, MA)                Equity             $170,250
Company behind Abroad101, an interactive online community around study abroad programs

EnerTrac (Hudson, NH)                               Equity              $125,000
Fuel, oil, and propane tank monitoring products

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Bosses come and bosses go. Great bosses can inspire and mentor and lead through the toughest times. Really bad bosses can poison and divide an organization, and lead it to ruin even if things aren’t that bad.

In the course of my career I’ve come across many a successful person with a bad-boss tale to tell. Which means that bad bosses have mentored numerous entrepreneurs and future leaders—though maybe not in the way they intended. So what do these awful managers have to teach us? I asked a few leaders in the Boston innovation community for their best worst-boss stories, and the lessons they learned from the experience.

My own “worst-boss” is really an amalgamation of several bosses rather than a single person—and includes traits I sometimes observed in a boss’s boss, rather than someone I reported to directly. But I was watching.

These Worst Bosses Ever did several things I vowed never to do. First, they pointed fingers at others when problems arose rather than look at their own management or strategy. Second, and even more insidious, they would bully subordinates by pointing to the successes of other companies—sometimes competitors, sometimes not—as proof that their reports were not successful, without taking into account the fact that ours was a totally different organization, with far different (and usually much more modest) resources. They even would sometimes employ the dark art of “lying with statistics” to make it look like people—their own colleagues—weren’t performing. But when you examined the facts behind the stats, it was clear that oftentimes people deemed to have failed actually had succeeded stupendously given the resources at their disposal or the time they were given for a project. These kinds of practices created a huge atmosphere of distrust inside groups or companies—and many good people either left or did not feel at all motivated to do their best work.

One big lesson I learned from these various “un-mentors” was to take into account the whole picture of a group or organization as best as possible—its role in the company or world, its resources, and so on—and to set goals and expectations based on that, not what others are doing. Another was to play absolutely fair with metrics. Lastly, I vowed to take responsibility when bad things happen, and to try to find a constructive solution, rather than blaming colleagues.

What follows, then, are My Worst Boss Ever stories from five leading members of the innovation community—two CEOs, two venture capitalists, and a member of academia. They aren’t intended to embarrass anyone. We don’t name names, and we have tweaked descriptions to protect people’s identities. And I would stress that these are perceptions and opinions that are colored by specific circumstances, the employees’ own makeup, and other factors—and that bosses sometimes make decisions based on factors that employees can’t be privy to, or can’t fully appreciate because they aren’t the boss. Indeed, one person’s worst top dog might well be another’s best.

The point isn’t to condemn the bosses—it’s to provide some insights and lessons that might make us all better bosses, and maybe even better employees who can help our bosses! See if these experiences ring true with you.

Bill Aulet, Xconomist and Acting Managing Director, MIT Entrepreneurship Center: “It’s not obvious, because you’d think it is the most incompetent one—but the worst boss I ever had was smart and political, but lazy.”

“If they’re incompetent, then you don’t have to worry—you just go do your thing. When they’re smart, political, and lazy it just drives you crazy. They’re capable of being helpful and they …Next Page »

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There is arguably no other place on Earth with the concentrated innovation power of Kendall Square. Within a few-block radius of the Kendall Square T station on Main Street on the edge of the MIT campus, you can find an unprecedented collection of startups, large company labs and offices, and non-profit organizations, from the One Laptop Per Child Foundation to the Broad Institute and, of course, MIT itself. There are public companies, private companies, and incubators—and the work across these enterprises spans medicine and health, biotechnology, IT, the Web, software, hardware, energy, robotics, transportation, nanotech, media, and probaby everything in between.

It’s only fitting that such a unique place as Kendall Square should have its own tagline or motto that reflects its legacy of entrepreneurship and cutting-edge activities, coupled with collaboration, mentoring, and community building—and now it does: “The Future Lives Here.”

The tagline, which is being announced today, is the creation of the Kendall Square Association, of which Xconomy is a member. The association, with well over 100 members, was organized a year ago (its first meeting was this February) by a group of community leaders, including Xconomist Tim Rowe, who besides serving as the KSA’s president is CEO of the Cambridge Innovation Center and a venture partner at New Atlantic Ventures. “The purpose of the Kendall Square Association is to foster an environment that encourages creative collaboration and community-building across endeavors of all kinds, and that generates the dynamic energy that helps to transform leading edge ideas into global realities,” Rowe says in the statement announcing the tagline. He tells me the new motto is meant to dovetail with the motto recently adopted by the Commonwealth of Massachusetts: “It’s All Here.”

The Kendall Square branding process started this spring and was led by the KSA’s Marketing and Promotions Working Group, which is chaired by Sarah Gallop, co-director of government and community relations for MIT. Gallop, who is one of three MIT representatives on the KSA board, says Steve Herskovitz, president of healthcare-oriented marketing company Hammond Hill of Acton, MA, led the effort to come up with the tagline. And the new slogan represents only one step in the KSA’s branding and marketing push, she says. “We’ve finished the tagline process and are deep into logo work now. After that is complete, we’ll focus on finishing the KSA website.”

Rowe and Gallop say the KSA is just getting started with its plans to strengthen the community of entrepreneurship and innovation in Kendall Square. According to today’s statement, “Besides the branding process, the Association is also focused on a long term vision for the Square, with special emphasis on retail, restaurant, entertainment, and residential objectives.” Those plans include sponsoring a series of local talks and other events. And Rowe, together with many KSA members (including Xconomy) and others, is also privately pursuing the creation of an entrepreneurship-enhancing hangout that’s been tentatively dubbed the Venture Café.

What do you think of the new tagline? Feel free to leave your comments below.

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[Corrected, October 22, 2009 --- see below] I really hate the Yankees (sorry Bijan). Nothing good has come of them for me, except the time back in the early 90s when I was at Yankee Stadium with Trip Hawkins of Electronic Arts fame and Richard Nixon was sitting across the aisle, and two Secret Service guys offered to get us his autograph. I hated Nixon, too, but we were beaming like kids waiting for him to sign the baseballs we hurriedly bought from the souvenir stand…But I digress.

[Correction: Trip Hawkins informs me that the game where we got Nixon's autograph was at Shea Stadium, not Yankee Stadium! So the Yankees haven't done anything for me.]

With the Red Sox dead and the Yanks in the AL Championship Series, I figured why not come up with a different kind of Boston vs. New York championship series: the AL VC Championship Series. Last week, I took a deep data dive into third quarter venture deals in Massachusetts. This week I did a little research into how New York VCs fared, and figured let’s stack them against the MA home team. I do this for no other reasons than a) New York is a major player in venture and b) the comparison makes me feel better about the Yankees rolling their way toward the World Series.

All the data is from ChubbyBrain, our New York-based (but surely they love the Sox) partner and information services company developing tools for investors, startups, and aspiring entrepreneurs. Click on any image to make it larger. Let’s play ball.

Summer swoon for the VC Yanks while the VC Sox step it up down the stretch.

Looks like the NY VCs were at the ballpark watching the Yanks in September—Sox kept their focus.

Internet investments going to extra innings.

But VC Sox clearly have a more balanced lineup.

Now for the World Series. I hear California has some good teams.

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This is Terry McGuire’s fifth big economic downturn as a venture capitalist, the first being Black Monday in 1987. But when he gets together to chat with Peter Brooke tomorrow night, he’ll be the inexperienced one. That’s why I’m incredibly excited about our Xconomy Forum tomorrow night, which will be held at the offices of WilmerHale in downtown Boston. The two venture capital pioneers will be offering a fantastic lens—or set of lenses—with which to view our economy, the state of venture capital and private equity today, and how they have evolved and will continue to be major forces in shaping our local and global economies.

You can find out all about the event here. We only have about 10 tickets left, and sales end at midnight tonight, so get yours now. But just to give you the basics, McGuire is a co-founder and managing director of Polaris Venture Partners and chairman of the National Venture Capital Association. Brooke is the founder and chairman of Advent International and TA Associates, and one of the true pioneers of the venture industry in New England who has also played a major role in the emergence of the private equity market. 
Brooke’s forthcoming book, A Vision for Venture Capital, written with Daniel Penrice, covers his long and successful career in VC and private equity—and looks ahead to provide insights on how the private equity field can help the world’s economies recover from the current recession and grow.
Although the book has not yet been released, a few advance copies will be on hand at the event for attendees to look over.

The chat will start off with a short overview from Brooke about the evolution of venture capital and private equity, and then McGuire will provide a quick picture of the current state of venture. Then the two will sit down together and McGuire will conduct a chat with his fellow investor—one that they hope will have plenty of audience interaction.

McGuire says that the single thing he is looking forward to most is Brooke’s views on past recessions and the insights they hold for the current downturn. “I would like to hear how he reflects on when the economy hit a rough patch, what impact did it have on the business, and what lessons can we learn today,” McGuire says. But they will also talk about the scandals that have wracked private equity in the past year—and how Brooke thinks that might influence the field going forward. McGuire and Brooke will also tackle anything else that’s on the audience’s mind.

We hope to see you there. Register here.

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We’ve brought you a lot of third-quarter venture data in the last week or so—and we’re not done yet (hint: I have something special coming up for you baseball fans). But we haven’t gotten around to our usual Top 10 deals list.

So let me remind you, it was a pretty good quarter here in Massachusetts. Overall venture investment into Bay State startups climbed substantially over Q2, capped by a strong September in which VCs invested some $228 million in 25 deals, according to data from ChubbyBrain, a New York-based information services company.

And now let me show you the list of the top 10 venture deals in New England—all of which happen to be from Massachusetts. This comes from a different set of data provided by Dow Jones VentureSource.

Top 10 New England Venture Deals of the Third Quarter

Epizyme (Cambridge) — $32 million
Second round
(Investors: Amgen Ventures, Astellas Venture Capital, Bay City Capital*, Kleiner Perkins Caufield & Byers, MPM Capital)

Avila Therapeutics (Waltham) — $30 million
Second round
(Investors: Abingworth Management Inc., Advent Venture Partners, Atlas Venture, Novartis Venture Fund*, Polaris Venture Partners)

Gloucester Pharmaceuticals (Cambridge) — $29 million
Later stage
(Investors: Apple Tree Partners, Novo*, ProQuest Investments, Prospect Venture Partners, Rho Ventures)

iWalk (Cambridge) — $20 million
First round
(Investors: General Catalyst Partners*)

Aveo Pharmaceuticals (Cambridge) — $20 million
Corporate financing
(Investors: OSI Pharmaceuticals)

PrimeraDx (Mansfield) — $19.8 million
Later stage
(Investors: Abingworth Management Inc., Burrill & Company, CHL Medical Partners*, InterWest Partners, Invus Group, Malaysia Technology Devt Corp, MPM Capital)

Rapid Micro Biosystems (Bedford) — $18.6 million
First round
(Investors: Kleiner Perkins Caufield & Byers, Quaker BioVentures, TVM Capital GmbH, VIMAC Ventures)

MooBella (Taunton) — $18 million
Later stage
(Investors: Inventages Venture Capital*)

Pervasis Therapeutics (Cambridge) — $17 million
Later stage
(Investors: Flagship Ventures, Highland Capital Partners, Polaris Venture Partners)

Advanced Electron Beams (Wilmington) — $14.3 million
Later stage
(Investors: Atlas Venture, Flagship Ventures*, GE Energy Financial Services, General Catalyst Partners, RockPort Capital Partners)

* Lead investor

I have to mention the 11th ranked deal—iMedX, which took in $13 million in first-round funding. The company hails from Shelton, CT, and was the biggest third-quarter deal in New England outside of Massachusetts.

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It was a cold and drizzly night (how’s that for original writing?) last Thursday, and I was running late. But Dogpatch Labs Cambridge was holding its housewarming party across the street from Xconomy World Headquarters, so I braved the elements to stop in.

I walked into a crowded house of 70 folks or so, boxes of pizza, ice tubs of beer, and a lot of energy in the funky space, which is nestled inside the offices of e-retail infrastructure company Allurent in the American Twine Building on Third Street here in Cambridge, MA.

Dogpatch is a workspace/incubator run by Polaris Venture Partners. I profiled the original Dog Patch Lab in San Francisco earlier this year, and then wrote about Dogpatch Cambridge when it was announced last month. There’s enough desk space for 15 or so people in a big open area. The idea is that entrepreneurs will come for a few months, work on their ideas, and hopefully emerge ready to take things to the next level. Polaris provides the space, Internet connections, and no doubt some advice free of charge, but takes no equity in the companies—trusting that good things will happen if the companies grow and need funding.

I grabbed a brew just in time for a short welcome by Polaris’ Dave Barrett, who told the crowd his firm was trying to create the same kind of nurturing atmosphere for nascent companies as in the heavily Internet-oriented San Francisco offices—except that Dogpatch Cambridge is meant to reflect the diversity of the local innovation community, with its expertise in energy and life sciences, as well the Web space. The lab will “pull on that” wider expertise, is how he put it.

I then had a great time catching up with folks I knew, and meeting new entrepreneurs and other guests. Here are some notes and impressions:

—There are 16 Dogpatchers in what Barrett calls the “first pledge class.” (See the end of this story for a list of the current roster). Ten have started already, the rest are coming in this week. Over 100 teams have applied!

—Dogpatch keeps changing its name! It was originally Dog Patch Lab (singular). Then when the Cambridge branch opened, it became Dog Patch Labs. Now it is Dogpatch Labs. This is bad, because it makes it look like we journalists got things wrong in previous stories. (The Dogpatch website’s About page still says Dog Patch, by the way.)

—I also met Sami Shalabi, co-founder of Zingku, which did “supercharged” mobile text and picture messaging. Zingku was acquired by Google two years ago, and Shalabi works at Google in Kendall Square. He and Polaris’ Amir Nashat were college roommates at MIT.

–One of the newest Dogpatchers is Raj Aggarwal, of Localytics, which does analytics for mobile apps. Localytics was part of TechStars’ first Boston graduating class last month and just moved into the kennel last Wednesday.

—Speaking of TechStars, one Dogpatcher who wasn’t …Next Page »

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One of the worst things that happened in the Boston entrepreneurial community this year was that Y Combinator decamped to do all its incubating of new tech companies in Silicon Valley. One of the best things that happened was that a few months later, TechStars moved right in to fill the void. The incubator camp run out of Boulder, CO, announced it was coming to town in February, and fielded its first class of Boston entrepreneurs this summer. And if you’d been to its Investor Evening last month, when the first Boston grads made their pitches at Microsoft’s NERD (New England R&D Center), you’d have seen first-hand from the packed house and all the energy and excitement just how welcome TechStars has become.

But despite that spectacular debut, TechStars was out on the streets and unsure of whether it would return. The group had taken up a suite of former Kaplan test-prep classrooms in an office building in Cambridge’s Central Square. But, it turns out, that was only a short-term lease—and it has ended. At the Mass Technology Leadership Council’s unconference on October 1, the executive director of TechStars Boston, Shawn Broderick, told Wade that TechStars had not determined whether it would return to the area for a second year. It depended on how investors felt, and whether enough of the firms in its first class found funding.

Broderick told me yesterday that he has just gotten the green light. “We are definitely planning to do TechStars Boston 2010,” he confirmed in an e-mail. “The investors met on Friday in fact to sort that out. So we’re on!”

He’s not sure where TechStars will set up shop. “We’re homeless until the 2010 program starts up,” Broderick wrote. But the TechStars Boston leader is not. He has moved into Dogpatch Labs, the incubator and entrepreneurial workspace operated by Polaris Venture Partners.

Dogpatch just had its grand opening last Thursday. Broderick says he knows Polaris general partner Dave Barrett, who is one of the point people for Dogpatch in Cambridge. “I asked Dave for a desk and he said ‘sure!’”

As for TechStars, Broderick says the planning for 2010 is underway. “We’ll have the details sorted out in the next few weeks.”

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Demo conference executive producer (and VentureBeat founder) Matt Marshall and his posse will be in town next Thursday scouting out startups interested in unveiling their companies or products at the spring edition of the semi-annual tech event.

We’re planning on knocking back a beer or two (or maybe something stronger) with Matt and the Demo gang—and hope to see you there. It all takes place at Vox Populi at 755 Boylston Street, from 6:00 to 8:00 p.m.

Matt came to town this summer in a scouting trip for Demo’s fall event, which just took place last month in San Diego (one of Xconomy’s cities). It was a great evening and this one looks to be even better. There will be cool startups, Demo vets, and other great folks. At Demo, if you aren’t aware, selected startups do six-minute onstage demonstrations of their newest products or concepts.

Not only is it free (registration is required, though), the first 38 folks through the door get a coupon for a free drink. (It’s supposed to be 40, but Wade and I plan to be there first). Register here.

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Just about everyone loves a good pie…chart, that is. If you’re one of those, read on.

On Tuesday, we ran a story here in Boston about all the September venture deals in Massachusetts—and then my colleague Bruce followed that up a bit later that same day with a national roundup of third-quarter venture figures.

Both those stories relied on data provided by our partner ChubbyBrain, a New York-based information services company developing tools for investors, startups, and aspiring entrepreneurs. And they contained a few interesting charts and tables.

Today, though, I can’t resist sharing more of the details on Massachusetts from ChubbyBrain’s extensive third quarter report, “Pulse of the Innovation Economy,” which holds far more information about venture deals numbers, VC dollars invested, hot sectors, and stage of investments than we could cover in our more general posts on Tuesday.

So here we go. If your eyes are having a bit of trouble picking out the details, just click on any image to enlarge it.

The Bay State and New England are distant seconds—can anyone say “California?”—in both deals and dollars.

VC investment in MA showed a nice rise in Q3 vs. Q2 of 2009.

VCs took some vacations in August.

Burlington?

Healthcare and Internet dominate—but there is diversity of investment.

Whoever said early-stage deals are dead in MA is dead wrong.

We got our Web on.

No. 2 in mobile and telecom. Cowboys in Colorado and Texas closing in?

Has the bloom gone off the cleantech rose?

I live in Cambridge.

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It wasn’t just school that people got back to in September—it was startup funding. After slowing noticeably in August, the total venture investment into Massachusetts startups last month hit its highest level since we began tracking the monthly figures in June. All told, investors put $228 million into 25 deals involving Bay State startups. That was good enough to eclipse the $215 million (also involving 25 deals) seen in July—and a 27 percent jump in dollars from the $179 million invested through 21 August deals.

The tallies come from data provided to Xconomy by ChubbyBrain, a New York-based information services company developing tools for investors, startups, and aspiring entrepreneurs.

As always seems to be the case, companies in the healthcare sector accounted for the most investment dollars—$98.8 million of the total. The sector also accounted for the month’s two biggest deals. The largest was a $30 million Series C round for Seaside Therapeutics, a stealthy Cambridge biotech based on research at MIT that is out to create the first drugs designed to treat the neurological disorder underlying patients with Fragile X syndrome and autism.

That was followed by a $25 million Series I (I didn’t know the deals alphabet went that high!) round for Ironwood Pharmaceuticals, also of Cambridge, which is developing a drug to treat irritable bowel syndrome. (After that report came out, Ironwood CEO Peter Hecht e-mailed to say that deal was part of a larger milestone payment from one of Ironwood’s partners.) Verivue, a Westford-based provider of multimedia distribution switches for cable and telecom operators, brought in $20.1 million, good enough for third place. And I would be remiss if I didn’t mention MooBella, which is creating a line of make-your-own ice cream machines. The Taunton firm, which Ryan profiled, brought in $18 million in the month’s biggest A round, and the fifth-biggest deal overall.

Read on for a table of all the September venture deals in Massachusetts, as well as a list of the three debt-financing deals, all in healthcare, which tallied $4.65 million.

Other gleanings from the September data—including a few surprises:

—For the first time since we started working with ChubbyBrain in June, the majority of …Next Page »

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The second big thing in the genesis of Twitter app store oneforty (the first being proof that a real economy was possible on Twitter—see Part 1 of the oneforty story) was that Laura Fitton couldn’t find anyone besides herself to manage the company.

As readers of the initial installment of this story will remember, Fitton (Twitter handle: @pistachio) was a single mom with a consultancy to run and a book to write. She didn’t want to work full-time on a startup. “Entrepreneurs are nuts and out of touch with reality, and they have to be to survive the process of believing they can do what they need to do,” Fitton says. She really didn’t want to go there.

But at the same time, Fitton couldn’t sleep because this idea of creating an app store for Twitter—what is now Brighton, MA-based oneforty—would not go away. Her solution: find a dedicated team to run the business, and she would serve as an advisor.

Fitton spent the early part of this year trying to do just that. But by early March, Fitton accepted that if oneforty was going to get going, she would have to do it herself. She hadn’t intended to go to the annual South by Southwest music and media conference in Austin this year: it wasn’t a good place to market her Twitter consulting business, because everybody there already embraced social media. But now that social media awareness meant people would understand her idea. Two days before the event, she decided to fly to Austin after all and look for angel investors.

One of the first people she sought out was Guy Kawasaki of Garage Technology Ventures, an early-stage venture firm in Palo Alto, CA. Fitton had an in with Kawasaki. Back in August 2007, she had been watching the live stream of him speaking at the Gnomedex tech conference, where he remarked that Twitter was stupid. In response, Fitton had e-mailed him her Ode to Twitter post and said, “I think you’re wrong.” They had a short conversation—and about three weeks later Kawasaki posted: “God help me, I’m going to start Twittering. Dave Winer and Laura Fitton convinced me to take the leap, so it’s their fault.” (That’s Dave Winer, the RSS pioneer.)

So Fitton met with Kawasaki in Austin and asked point black: would he invest in oneforty? Recalls Fitton: “He said, ‘No but I’ll advise. When I invest the company usually doesn’t do well, so advising is what you want anyway.’”

Having Kawasaki’s name to drop was nice (he’s still an advisor). Entrepreneurial strategist Dan Martell suggested she set up an angel pitch call, which allowed interested investors to dial in to hear her spiel, saving her one-on-one meetings. She did the call a few weeks after SXSW, and it proved extremely helpful. While no one invested directly from the initial call, everyone who was on it has “stayed involved in some way, shape, or form,” Fitton says. She learned a lot from the experience and the questions asked. And she put an edited recording of her pitch on a secure site that other potential angels listened to—and not only did several of them invest, she later learned it helped convince one of her first employees to sign on as well.

The buzz and momentum around Fitton built fast. Between mid-April and mid-July, Fitton …Next Page »

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It’s an Xconomy holiday today, but I couldn’t resist a quick pointer post to an argument heating up across the Web—one that is related to a story we ran here last week about a new Cambridge, MA-based group, Revolutionary Angels, which announced its plans to hold a quarterly business plan competition.

Revolutionary Angels drew fire from a few readers about its plan to charge would-be startups $4,995 to pitch at the competition, in which they could win up to $250,000. What’s been happening over the weekend is that (on Friday night, as far as I can determine) Mahalo founder and Internet commentator Jason Calacanis posted his own long diatribe against the practice of angels charging entrepreneurs to pitch. He didn’t name Revolutionary Angels, but did name five others.

Calacanis’s post is called: “What startups shouldn’t have to pay to pitch angel investors.” And it carries the disclaimer: “written with boiling blood.”

I’ll say. Here are a few of Calacanis’ choice words:

“I’ve been in the startup scene since 1994 and in those 15 years I’ve met, interviewed — and in some cases, pitched — the most powerful investors in technology. None of them have ever charged me a dime for doing so. Why? BECAUSE THEY ARE RICH!

It’s low-class, inappropriate and predatory for a rich person to ask an entrepreneur to PAY THEM for 15 minutes of their time. “

This morning, PE Hub’s Deborah Gage also pointed to Calacanis’ post and provided responses from some of the groups he mentioned. Her summary of the responses:

“Events are not free, according to privateequityforums.com and the Tech Supper Club, and EVERYBODY charges, including TechCrunch — you can charge entrepreneurs, investors or sponsors, or some combination of the three.

Also, they argue, they’re selling a service because they get entrepreneurs in front of serious, qualified investors, which is hard for a lone entrepreneur to do — there are costs in marketing a startup no matter how an entrepreneur chooses to spend the money.”

Check out the arguments and see what you think. Or maybe you have something better to do on a holiday.

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Barely two years after he joined Microsoft here in Cambridge, MA, to launch its new Startup Labs, Reed Sturtevant is leaving the company to “pursue other interests,” Microsoft announced today.

Sturtevant’s departure was part of a broader announcement that Ray Ozzie, to whom Sturtevant reported, had reorganized his group to create the new Future Social Experience (FUSE) Labs, which will be focused on social computing. The lab will be headed by Lili Cheng, and will take the Microsoft Startup Labs in Cambridge under its auspices, along with another group previously part of Ozzie’s organization, the Rich Media Labs.

“FUSE Labs’ team will explore new social, real-time and media-rich applications and services that add value to existing products, or could be released on their own,” Microsoft said in a statement. “By combining these teams under a single leader and mission, Ray believes FUSE Labs can achieve greater impact through tighter focus and a more holistic approach. “

Sturtevant is a well-known and highly respected figure in New England computing, and beyond. He was most recently CTO at Eons before joining Microsoft to start the Startup Labs, an advanced development lab meant to help explore new ideas and speed them to market.

Sturtevant declined to comment on his departure, but you can read a lot about his background here.

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