The Name Is New, But CRV’s Money Moved to California Years Ago

7/17/14Follow @curtwoodward

With its new $393 million investment fund secured, longtime Boston venture capital firm Charles River Ventures is making its love affair with the West Coast official. 

As partner Jon Auerbach noted in a blog post, the firm’s 16th fund represents the first time that the majority of its investing team is based in the San Francisco Bay Area.

“A decade ago, the majority of partners and our portfolio were East Coast-based. Today, that’s totally reversed,” Auerbach wrote.

To emphasize that westward shift, he added, the firm is changing its name to just CRV—a symbolic shedding of the river that runs through the heart of the greater Boston area.

But this isn’t an overnight change, as Auerbach acknowledges. If you look at the numbers, it’s clear that CRV has been showering California companies with cash for some time now.

We asked the analysts at CB Insights to look at the location of companies backed by CRV, and the results are clear. Over the past five years, the vast majority of CRV’s investments have gone to California-based companies.

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The CB Insights analysis tracked the first investment that CRV made in a company, rather than follow-on checks to existing portfolio companies. That’s a good indication of where the firm’s priorities have been, since CRV focuses primarily on leading early stage investments.

It’s also interesting to note that, since 2010 at least, the firm has been writing a varying number of checks to companies based outside of Massachusetts and California. CB Insights also looked at the first half of 2014, which shows a continued prominence of California-based companies in CRV’s portfolio.

So what does CRV’s new brand name and stated West Coast focus mean for New England entrepreneurs? Maybe not so much.

As Auerbach wrote, the firm still plans to invest in New England companies, especially in sectors like robotics and IT infrastructure that are the region’s historical strengths. One fresh example: CRV is an investor in MIT robotics startup Jibo, which began showing off its first product this week.

“But the West Coast is where the center of gravity for technology and investing, especially in consumer, mobile and cloud computing, has clearly shifted,” he wrote. “Over the past 12 years, we’ve taken our rich East Coast history from our office next door to MIT and gone West.”

It’s also worth pointing out—as Auerbach did—that this strategy has paid off well for CRV.

In another CB Insights analysis, the firm was one of the top performers across all U.S. venture capital when you add up the number of portfolio companies that have been acquired or completed an IPO with a valuation of $1 billion or more. West Coast portfolio companies have helped plump up that resume for CRV, including investments in Twitter, Yammer, and RPX.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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