An unusually high percentage of this week’s New England tech and life sciences deals came from companies based in Boston proper. What’s up with that?

—Spark Capital of Boston led a $7 million Series B investment in Long Island, NY-based Aviary. Backed also by Bezos Expeditions, Aviary makes cloud-based software for graphic design, audio editing, and the like.

—Boston’s American Well, whose Web-based medical consultation system in used by several large health insurance plans, raised $10 million in new equity funding, according to a regulatory filing. Investors in the round were not named.

—Waltham, MA-based Axeda raised $5 million in a Series B funding round led by JMI Equity and $4 million in venture debt from MMV Financial. Axeda provides a cloud-based system for wireless tracking of company assets.

—Raytheon (NYSE:RTN), also of Waltham, completed its buyout of Cambridge, MA-based BBN Technologies. The purchase price, which wasn’t disclosed when the deal was announced, was about $350 million.

—E-commerce firm GSI Commerce (NASDAQ:GSIC) agreed to acquire Boston-based Retail Convergence Incorporated (RCI) for $180 million in cash and stock and as much as $170 million in performance-based payments. RCI owns Rue La La, an invitation-only website selling designer clothing and accessories at a discount, and Smart Bargains, a site selling more affordable clothing, jewelry, and home goods.

—SEC filings indicate that Burlington, MA-based coronary stent maker CorNova raised $2.5 million of a proposed $6 million in equity financing. Investors in the deal were not specified.

—Cambridge, MA-based Virdante Pharmaceuticals completed a second closing of its Series A financing round, bringing the total raised so far to $30 million. Investors have promised to boost that number to $47.75 million if the startup, which is developing new antibody-based drugs to combat autoimmune diseases, meets certain milestones. Ryan has a nice profile of Virdante and its technology.

—Boston’s ScanScout, an online video ad provider, completed its $8.5 million Series B round of venture capital. EDB Investments, which invests on behalf of the government of Singapore, provided the cash.

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It was a big week for big companies. Amazon’s stock soared, and the e-commerce giant made a deal with Microsoft that should make Kindle e-books even more popular. There was also interesting deals news from Bing and a few Northwest venture firms and startups.

—Kennewick, WA-based Infinia has raised $3.25 million in debt and options out of a total financing round worth as much as $10.5 million, as Luke reported. The investors were not disclosed. Infinia, which (before this latest round) has raised $84 million from a syndicate that includes Paul Allen’s Vulcan Capital and Vinod Khosla, is developing novel solar power systems.

—Seattle-based Bezos Expeditions, the venture firm run by Amazon’s Jeff Bezos, re-upped with an investment in Aviary, a design software startup based in Long Island, NY. The $7 million Series B round was led by Boston-based Spark Capital. Aviary makes cloud-based software for graphic design, audio editing, and other creative digital services.

—Amazon (NASDAQ: AMZN) is teaming up with Microsoft (NASDAQ: MSFT) to release Kindle for PC, a software application that will let people read Kindle electronic books on Windows personal computers. No financial terms were announced. The free application will be released next month.

—Revolution Computing, which has offices in Seattle and New Haven, CT, raised $9 million from North Bridge Venture Partners of Waltham, MA, and Intel Capital, based in Santa Clara, CA, as Wade reported. The startup, which provides software and support for the statistical programming language known as “R,” also announced that Norman Nie, a veteran of the data mining software firm SPSS, is its new CEO.

—Kirkland, WA-based OVP Venture Partners led a $12 million investment in RedSeal Systems, a security software firm in San Mateo, CA. Existing investors Venrock Associates, Jafco Ventures, Sutter Hill Ventures, and Leapfrog Ventures also participated in the deal, which brings RedSeal’s total funding to more than $43 million. OVP managing director Mark Ashida has joined the company’s board.

—Bellevue, WA-based AudienceScience confirmed it has raised $20 million from Silicon Valley investors Mohr Davidow Ventures, Mayfield Fund, Meritech Capital Partners, and Integral Capital Partners. The online advertising firm said it will use the funding to hire new staff, do R&D in targeted advertising, and expand internationally. Luke previously reported that AudienceScience (formerly called Revenue Science) had closed a $15.1 million funding round involving equity, debt, and preferred stock, which had the potential to go up to $20 million, based on an SEC filing.

—Microsoft is integrating real-time status updates from Twitter and Facebook into its Bing search engine, as Thea Chard reported in her first freelance story for Xconomy. The Redmond, WA, software company has formed non-exclusive partnerships with the two social media networks, as part of Microsoft’s plan to fuse the “real-time Web” with its search engine to create a new kind of social-media focused reader. Bing’s access to tweets is now in beta form, while the Facebook deal, which will grant the search engine access to all publicly shared information from the social network’s users, will be effective at a later date, according to Microsoft senior vice president Yusuf Mehdi.

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Boston-based Spark Capital has led a $7 million Series B investment in Aviary, a creative design software startup based in Long Island, NY. Bezos Expeditions, the Seattle-based investment firm of Jeff Bezos from Amazon, participated in the round as an existing investor. Aviary makes cloud-based software for graphic design, audio editing, and other digital creation services. As part of the deal, Mo Koyfman of Spark Capital is joining Aviary’s board.

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A bill proposing restrictions on non-compete agreements in employment contracts in Massachusetts will have its first hearing on Beacon Hill next week, after nine months of discussion, revision, and compromise.

The state legislature’s Joint Committee on Labor and Workforce Development will hear comments on the bill, introduced by State Representatives Lori Ehrlich and Will Brownsberger, on October 7. Called the Noncompetition Agreement Act, the bill would make non-compete agreements unenforceable for employees of Massachusetts companies who earn less than $75,000 per year. The agreements—which are often used by employers to prevent former employees from going to work for competitors or from starting competing firms during the first year or so after they leave—would still be enforceable for employees who make more than $75,000, but only when employers can show the agreements are needed to protect trade secrets, confidentiality, or goodwill.

It’s the third such bill to circulate on Beacon Hill this year. Two related bills, one from Ehrlich that would have prohibited non-compete agreements for employees making less than $100,000 a year and one from Brownsberger that would have banned the agreements altogether, will technically be up for discussion at the hearing. But Ehrlich and Brownsberger are focusing their reform effort on the new, joint bill, a revised version of which was released this week.

The bill itself hasn’t changed much since the previous revision, which we wrote about in July; the big news then was that Brownsberger, in an effort to round up more support for non-compete reform and head off objections from the business community, had joined with Ehrlich in calling for restrictions—rather than an outright ban—on non-compete agreements. Russell Beck, an attorney with Boston-based Foley & Lardner who has been helping Ehrlich and Brownsberger …Next Page »

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The Northwest deal flow in the past week tended toward small partnerships and acquisitions. But there was still some significant activity in software, Internet, and entertainment.

—As ghostbuster Bill Murray once said, “Dogs and cats living together…mass hysteria!” Seattle-based Pet Holdings, operators of I Can Has Cheezburger (Lolcats) and other humor websites, formed an advertising partnership with San Francisco-based social network Dogster. Dogster will sell ads for the Cheezburger network in exchange for the greater traffic on Pet Holdings’ popular sites (which will hit 1 billion page views this week). Details of the revenue split were not given.

—The Washington Technology Industry Association (WTIA) joined forces with advocacy organization TechAmerica in Washington state, thereby broadening its membership to include more companies in hardware, electronics, and devices. WTIA has now become TechAmerica’s exclusive management and marketing partner in the state.

—Seattle-based Appature is getting close to securing its first round of venture funding. No deal has closed yet, but the bootstrapped and profitable healthcare marketing startup has generated a lot of interest in the VC community. Appature was founded in early 2007 and develops software that helps companies in healthcare, pharmaceuticals, and medical devices understand their customers better and do more effective marketing.

—Kirkland, WA-based Digeo, the home entertainment company backed by Paul Allen, was bought by Arris, a Georgia-based broadband communications firm, for $20 million in cash. Arris will acquire Digeo’s high-definition digital video recorder, called Moxi, along with about 75 Digeo employees and their expertise in video networking and multimedia services. About 10 Digeo staff members will lose their jobs in the transition, however.

—Seattle-based Maveron and Boston-based Spark Capital co-led an $8 million Series A investment in Altius Education, a San Francisco company deveoping online higher education programs through partnerships with nonprofit universities. The Noah Fund also participated in the funding. Maveron was founded in 1998 by Howard Schultz and Dan Levitan, and focuses on investments in consumer and tech companies.

—Microsoft (NASDAQ: MSFT) acquired the technology assets of Interactive Supercomputing (ISC), a parallel computing software firm in Waltham, MA, as Ryan reported. Financial terms of the deal weren’t given. ISC’s chief executive, Bill Blake, and the firm’s technical experts are moving into Microsoft’s New England Research & Development Center in Cambridge, MA.

—This was not a new deal, but I took a closer look at Bellevue, WA-based Ignition Partners’ investments in cloud computing and virtualization. The VC firm’s biggest win to date is XenSource, the Palo Alto, CA-based virtualization company that was bought by Citrix (NASDAQ: CTXS) for $500 million in 2007. Three other Ignition investments in the space—Skytap, InstallFree, and Xeround—are still in pretty early days, but are off to promising starts.

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The big news this week was obviously the A123Systems IPO, but quite a few other New England tech and life sciences firms had deals to report as well.

—Mansfield, MA-based PrimeraDx—a developer of automated lab equipment spun off by Providence, RI-based Sention four years ago—raised $20 million in a Series C financing round. New investor CHL Medical Partners of Stamford, CT, led the round; existing investors Abingworth, Burrill & Company, InterWest Partners, the Invus Group, Malaysian Technology Development Corporation, and MPM Capital participated as well.

—Biogen Idec (NASDAQ: BIIB) of Cambridge, MA, launched a $14.50-per-share tender offer for Facet Biotech (NASDAQ: FACT). The board of the Redwood City, CA-based company rejected Biogen’s $355 million offer earlier this month; the tender offer will expire October 19.

—Cambridge-based online game maker Conduit Labs raised $3 million in new equity financing. The new funds were reportedly from the same investors who put $5.5 million into Conduit in August 2007: Charles River Ventures of Waltham, MA, and Prism VentureWorks of Westwood, MA.

—Waltham, MA-based Inverness Medical Innovations (NYSE: IMA), a diagnostics maker and avid acquirer of other firms, picked up Seattle-based Free & Clear for $100 million in cash, plus up to $30 million more, depending on the Seattle firm’s 2010 revenues.

—Battery maker Boston-Power of Westborough, MA, inked a deal with Dr. Battery, of Vancouver that will put Boston-Power’s long-lasting laptop batteries on the market as …Next Page »

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Shareaholic founder Jay Meattle was in touch today to say that his Cambridge startup has raised its first round of angel funding. Back in July, I reviewed Shareaholic’s popular browser plugin, which makes it easy to save or share material found on the Web via common social networking, social bookmarking, and news aggregator services.

Meattle wasn’t specific about the size of the round, saying it amounts to “a few hundred thousand” dollars. The list of funders, however, is a who’s who of Web 2.0 entrepreneurship and investing around Boston, including one serial entrepreneur, David Cancel, who worked with Meattle at both of his last two companies, Lookery and Compete.com.

The full list of Shareaholic’s angel investors includes:

—Ed Roberts, founder, MIT Entrepreneurship Center; co‐founder, Sohu.com
—Dharmesh Shah, founder and chief technology officer, HubSpot
—Eric Dobkin, Advisory Director, Goldman Sachs & Co.
—Brian Balfour, co‐founder, Viximo
—David Cancel, co‐founder, Compete
—Andrew Payne, investor in Care.com, Digium, HubSpot, and SmartFlix; co‐founder, FanSnap
—Brian Shin, founder and CEO, Visible Measures

Cancel, Payne, and Shin also serve on Shareaholic’s advisory board, along with Rob Go of Boston-based Spark Capital.

“I couldn’t think of a better group,” Meattle says. “They have deep knowledge and expertise in the space we’re playing in. We lean on them for advice all the time—they’ve all ‘been there and done that’ again and again.”

When I last talked with Meattle about Shareaholic, he said the company had spent a long time getting its browser plugin to the point where it’s comprehensive and easy to use, and that the coming months would be devoted to experimenting with different ways of monetizing the service. He confirmed that plan today. “We plan to spend the next few months determining what the best use of our data and user reach assets are,” Meattle says. “We have some pretty good hunches and have a lot of exciting stuff in the pipeline.”

Given the momentum the company has built up and the opportunities it has identified, “the time was right to raise some money to further accelerate and support our product roadmap,” Meattle adds.

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Seattle-based Maveron and Boston-based Spark Capital have co-led an $8 million Series A investment in Altius Education, based in San Francisco, according to a press release today. The Noah Fund also participated in the deal. Maveron was founded by Dan Levitan and Howard Schultz in 1998, and focuses on consumer and tech companies. Altius was born in 2007, and is developing online higher education programs through partnerships with nonprofit universities.

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[Updated October 5, 2009---see below] Today was a good day for Boston area entrepreneurs, as Polaris Venture Partners announced the opening of a new startup incubation and geek hangout space, Dog Patch Labs Cambridge, which will open next week on Third Street not far from Kendall Square.

Dog Patch Cambridge, which I wrote about earlier today, helps fill a real hole in the Boston innovation landscape. But Polaris it isn’t the only group filling this hole. In fact, the Dog Patch announcement is only the latest in what can be called a mini-explosion of interesting new incubation spaces and programs for entrepreneurs, all of which have sprung up since January, when Y Combinator announced it would no longer spend the summers in Cambridge and would instead stay year round in Mountain View, CA. I’m not saying they all got going because Paul Graham’s famous incubator left town—they definitely didn’t—but Y Combinator’s departure surely influenced some thinking and left a hole that, in the true spirit of innovation, several players likely rushed to fill.

Here’s my chronological tally of new programs, incubators, and investment funds for early-stage entrepreneurs that have opened in and around Boston since Y Combinator announced it was pulling up its Cambridge roots:

—January 2009— Y Combo pulls out.

—February: TechStars announces that it will bring its brand of entrepreneurial boot camp, providing seed funding and mentorship for early-stage technology companies, to Boston. The operation has since set up shop in Central Square in Cambridge, and is having its first Boston investor event tonight.

—April: Mass Medical Angels, a new angel group, forms to invest specifically in life sciences and medical startups.

—April-May: Xconomist Tim Rowe, president of the Cambridge Innovation Center, begins firming up plans for the Venture Café, which according to its Facebook page will be …Next Page »

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Boston- and Cambridge-based tech and life sciences firms cut the usual assortment of deals this week, but their brethren further out in New England were unusually active as well.

—Marathon Technologies raised a $7 million round of equity financing from undisclosed investors. The Littleton, MA-based firm makes disaster-recovery software for virtual and physical servers.

—Norwalk, CT-based Akademos, an online seller of used college textbooks and course materials, raised $2.5 million in equity funding from Kohlberg Ventures of Portola Valley, CA.

—Online video game maker Turbine, of Westwood, MA, reportedly collected $6.57 million of a planned $50 million Series D round of financing from existing investors. If completed, the new round would bring Turbine’s total venture funding to $145 million.

—EMC (NYSE: EMC) virtualization subsidiary VMware (NYSE: VMW) agreed to acquire San Mateo, CA-based SpringSource for $420 million in cash and stock. The deal marks VMware’s largest acquisition to date.

—Boston and U.K.-based crowdsourcing software firm Imaginatik (AIM:IMTK) raised $2.6 million from unnamed new and previous investors.

—MyWebGrocer, a Colchester, VT-based provider of …Next Page »

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Cambridge, MA, venture firm General Catalyst Partners is the lead investor in a $6 million Series B funding round announced today by New York, NY-based Boxee, which makes video browser software for navigating online video offerings on the large screen of a television. Existing investor Spark Capital of Boston was also in on the round, along with New York-based Union Square Ventures. The company has raised $10 million in venture capital altogether, and plans to release an improved beta version of its software this fall.

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I’ve got a nice variety of deals—particularly venture financings—to tell you about this week.

—Swiss drug giant Novartis opted to extend a collaboration with Alnylam Pharmaceuticals (NASDAQ:ALNY) of Cambridge, MA, for a fifth year. Under the extension, Novartis will continue to fund certain RNA interference research and development efforts at Alnylam through October 2010.

—Software maker Ibrix agreed to be acquired by Hewlett-Packard for an undisclosed sum. The Billerica, MA-based firm’s technology allows large enterprises to manage network file servers holding petabytes of data.

—Andover, MA-based Acquia raised $8 million in a second financing round. North Bridge Venture Partners and Sigma Partners participated in the deal, as well as the 2007 first round of financing for Acquia, which sells a commercial version of the open-source content-management platform Drupal.

—Cambridge-based Archemix teamed with Watertown, MA-based Dicerna Pharmaceuticals to make new drugs that combine the former’s “aptamer” technology with the latter’s RNA interference technology. Specific financial terms were not revealed, but Dicerna has an option to get exclusive rights to take the new drugs through development.

—Aveo Pharmaceuticals, also of Cambridge, cut a deal worth $20 million—including $5 million in cash and $15 million in investment—to extend a partnership with Melville, NY-based OSI Pharmaceuticals (NASDAQ: OSIP). The deal, which also includes two years of research funding, will give OSI expanded access to Aveo’s mouse model of cancer.

—Boston-based virtualization company …Next Page »

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5Min, the New York, NY-based publisher of instructional and do-it-yourself videos, announced today that it has raised $7.5 million in series B venture funding. Series A investor Spark Capital of Boston returned for the round, which was led by new investor Globespan Capital Partners, also of Boston. With a library of over 100,000 videos produced in partnership with publishers such as Car & Driver, Elle, Kiplinger’s, and Woman’s Day, 5min is the Web’s “largest ‘how-to’ video destination site,” founder and CEO Ran Harnevo said in a statement. The startup syndicates the videos to more than 200 outside sites covering subjects such as business, food, health, home & garden, sports, technology, and travel.

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[Editor's Note: Bijan Sabet of Spark Capital has kindly allowed us to cross-post this entry from his blog reacting to news today of a draft bill proposing compromise language on noncompete agreements in Massachusetts.]

My partners and I have been pushing to end the use of employee non-compete agreements for some time now.

We passionately believe in this issue and back in late 2007 I wrote that we should end these non-compete agreements. We planned on starting with our firm and then encourage our portfolio companies, entrepreneurs and other VCs to end this practice as well.

A few months later I wrote a guest post on GigaOm and also we started the Alliance For Open Competition. The idea was to start a grass roots effort to get rid of these things (n.b. we believe in protecting employers through the use of non-disclosure agreements, non-solicitation agreements and intellectual property governed by patent law). We were thankful that in a relatively short period of time prominent investors and entrepreneurs joined the cause and started speaking up.

Recently the Boston Globe Sunday Editorial took on this issue in their column—”Clause For Concern.”

I was pleased earlier this year when I was contacted by Rep. Brownsberger who was leading an effort for reform on this issue. Rep. Brownsberger and a team created House Bill 1794 which as originally drafted would give employees and employers the same protections that exist in California. I participated in a few sessions and was thrilled with the leadership of this bill. As a result our firm, Spark Capital formally endorsed this bill. I have huge respect and admiration for Representative Brownsberger.

Sometime over the last week or so that bill was modified significantly. The revised draft is on Rep. Brownsberger’s website. In our view, the revised changes won’t solve the problem in our humble opinion because they simply don’t go far enough to reform and create real change.

Here’s the principle changes they made last week:

1. Employees who make under $50k are free of non-competes. If you make more than that you are subject to a non-compete.

2. The revised draft requires that employers give advance notice that they will require non-competes in their offer letter.

3. Punish overreaching by employers by awarding attorney fees to the employee whenever an agreement is reformed or found unenforceable.

* * *

My reaction:

1. I don’t understand or agree with this new threshold of $50k/year. It will leave out plenty of entrepreneurs and employees.

2. The advance notice doesn’t help if every Massachusetts company requires non-competes.

3. Point #3 puts a huge risk on the entrepreneur/employee on the expense front. Who wants to fund a lawsuit? Even if it’s frivolous. Legal fees are expensive and they create a …Next Page »

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The directors of Foundry Group, a Boulder, CO-based venture firm, have signed on as supporters of the Alliance for Open Competition, a group lobbying to outlaw the use of non-compete clauses in employment agreements in Massachusetts and other states.

The alliance, founded last year by partners at Boston’s Spark Capital, argues that the non-compete clauses imposed by many Massachusetts employers stifle innovation by preventing entrepreneurs with good ideas from setting up new businesses that might be seen as competing with those of their former employers. Such agreements are unenforceable in California—a fact that may aggravate brain drain from New England to the West Coast, in the view of many people active in the local entrepreneurial scene.

Today Foundry managing directors Brad Feld, Seth Levine, Jason Mendelson, and Ryan McIntyre added their names to the list of venture capital partners supporting the alliance. Spark partner Bijan Sabet announced the additions in a Twitter post today.

But why would a Colorado firm care about non-compete clauses in Massachusetts? I pinged both Sabet and Feld today for answers.

In an e-mail, Feld explained: “Since we invest all over the US (including MA) we are motivated both by MA specific reasons as well as our strongly held beliefs that broad-based non-compete agreements are inhibitors of innovation.”

And as Sabet pointed out, Feld is a founding member of TechStars, a Colorado-born startup incubator program that recently opened a Boston branch. “So he cares about this state,” Sabet said.

Here’s a rundown of all VC partners who have now joined the Alliance for Competition:

Bijan Sabet, General Partner, Spark Capital
Brad Feld, Managing Director, Foundry Group
Dennis Miller, General Partner, Spark Capital
Gwill York, General Partner, Lighthouse Capital Partners
Jeff Fagnan, General Partner, Atlas Venture
Michael Feinstein, Managing Director, Sempre Management
Michael Greeley, General Partner, Flybridge Capital Partners
Mike Tyrell, General Partner, Venrock
Jason Mendelson Managing Director, Foundry Group
Paul Conway, General Partner, Spark Capital
Paul Maeder, General Partner, Highland Capital
Ryan McIntyre, Managing Director, Foundry Group
Santo Politi, General Partner, Spark Capital
Seth Levine, Managing Director, Foundry Group
Todd Dagres, General Partner, Spark Capital

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Clear, a five-year-old biometric passenger identification service intended to speed air travelers’ passage through security checkpoints, shut down last night. According to the service’s website, parent company Verified Identity Pass of New York, NY, was unable to obtain credit to continue operations. Boston’s Spark Capital led a $44.4 million Series C venture funding round for Verified Identity Pass last August. Syncom Venture Partners, Lockheed Martin, Baker Capital, GE Security, and Lehman Brothers also joined that round, which brought the company’s total funding at the time to $116.4 million.

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The X Factor, which debuted last week without yet having a name, is a mostly weekly column featuring conversations with local innovators, entrepreneurs, and investors.

It’s a legendary story of doom here in Boston (folks around here kind of like gloomy stories)—how the local VCs passed on this idea called Facebook, the kids from Harvard moved west, and…the friggin’ Valley beat us again. It’s safe to say this story is trotted out dozens of times each year to show how Boston VCs don’t take risks, don’t do early stage, don’t understand consumer Internet businesses. In short, it’s the poster child for how New England missed the social media revolution.

But let me say here and now that this hackneyed story is passé, as old and behind the times as analog dialup.

I’ve felt this way for some time, but it was driven home to me during the recent Twitter craze. For one thing, although Twitter is based in San Francisco, its first venture investors were from the East Coast—and Bijan Sabet, a general partner at Boston-based Spark Capital, is nicely perched on its board.

But the presence of Boston-based VCs on the social Internet and new media scene hardly ends with Twitter. Depending on how you define the field, you can find Boston VCs behind a host of such investments, both in East Coast firms like Eons and Hunch (General Catalyst), and in West Coast companies such as social news site Digg (Highland led the Series C round last fall) or Metacafe (also Highland), and even Facebook (Greylock Partners, albeit out of its San Mateo office with partner David Sze, who also invested in Digg and LinkedIn). And that’s a quickly culled, very short list.

Among local firms, Spark, Polaris Venture Partners, and (to a slightly lesser extent) General Catalyst Partners, which has just brought in Facebook co-founder Chris Hughes as entrepreneur-in-residence, are leading the way in social media. I profiled Hughes in his new role at GC in last week’s debut column. So this week I am going to look at Spark and Polaris (I promise Web/media investments are not the focus of this column—I just want to get us beyond this Facebook meme once and for all). Between them, the two have amassed an array of new media investments that run from tweeting to blogging to Internet TV. (See my still-incomplete lists at the end of this article.)

The two most prominent social media investments by these firms are Twitter, in Spark’s case, and, for Polaris, Automattic (the company behind WordPress, the leading blogging platform). So I sought out the partners who made these investments—Sabet and Polaris general partner Mike Hirshland—for their take on my premise that it’s time to put the Boston-Facebook story behind us. I also asked them how their social media/consumer Internet deals came about, where they think Boston stands now in this arena, and whether New England could ever hope to compete with California in grooming social media companies (there is some reason for optimism on this front—read on).

Here’s my report.

Both Sabet and Hirshland agree that the center of gravity for social media companies is clearly on the West Coast—no surprise there—and tell how it takes a concentrated effort on …Next Page »

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After a months-long struggle, Xconomy has finally evicted the squatter who usurped our namesake account on Twitter. It took perseverance, Zen, and knowing folks in high Tweeting places to pull it off. But as of last night, Xconomy is on the Twitter air.

Thank you Bijan. Thank you Twitter. And thanks to CNET for the inspiration (read on).

The story might provide some insights into Twitter’s phenomenal growth—and the ongoing question of whether it is growing too fast. The saga began early this year, when Wade (who has had his own Twitter account since March 2007) went to activate an Xconomy account and found the name had already been taken, but apparently never been used. It took another few days to figure out that none of the editors, or our part-time CTO, had opened the account—and so, on Feb. 27 (late, true, but pre-Oprah anyway), Wade submitted the first help request seeking to evict the squatter.

As Wade explains in a rare interview, “Squatting is against Twitter’s terms of service, so we thought it would be a simple matter to get the squatter evicted and to get the right to use our own name on Twitter.”

But that first help request sat there for three weeks—until we found out it had been marked “resolved” in Twitter’s help system. Says Wade, “It turned out they had such a backlog of help requests that they had just decided to purge their system and marked everything ‘resolved.’”

Wade tried again in late March–and the help request was almost instantly addressed this time. But it turned out Twitter had merely detected key words in Wade’s request and had sent him an automated e-mail about how to change his password. This request was also marked “resolved.”

At which point, after a few more weeks of waiting while a third help request sat pending, Wade took a deep breath and called in the heavy artillery: Bijan Sabet, a general partner at Boston’s Spark Capital who happens to be on Twitter’s board and whom we have written about many times. “Though I hate calling in favors or leaning on people, we did know Bijan who is intimately involved in Twitter,” Wade says. “I figured that at this point I was desperate enough to resort to asking him if he could intervene for us.”

It seemed to work. After sending a note on April 8 explaining things to Bijan, Wade heard right away from a woman at Twitter who got the eviction process started and set up Xconomy with a temporary user name.

But it was not to be that simple. The temporary account just sat there. Communication with the Twitter helper ceased. And then, yesterday, Wade read an account by Rafe Needleman at CNET that (while raising his own questions about Twitter as a business) told how his own Twitter password snafu had been swiftly resolved by the Twitter help desk. “If CNET can get an immediate response for help from Twitter, why can’t we?” Wade reasoned (don’t answer that).

So last night he e-mailed the woman at Twitter again, but this time copied Bijan. And Presto, we finally went live (Twitter will not reveal the name of the evicted squatter—but we have our suspicions). You can now find three Xconomy-related accounts on Twitter:

http://twitter.com/xconomy — our company account

http://twitter.com/wroush — from our intrepid chief correspondent Wade Roush

http://twitter.com/bbuderi — from our founder and editor in chief, me, Bob Buderi

Thanks for listening to us chirp.

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Boston’s Spark Capital came out publicly today in favor of Massachusetts House Bill 1794, which would outlaw non-compete agreements in employment contracts in the state. The venture firm has been vocal on the issue for some time—its partners helped found the Alliance for Open Competition and sent Governor Deval Patrick an open letter opposing non-compete clauses in 2007—so it’s no surprise to see Spark backing the new bill, filed by State Representative Will Brownsberger in January.

The bill, which we wrote about on December 16 and January 12, is co-sponsored by State Senator Patricia Jehlen. It would void any part of an employment contract that restricts an employee’s ability to seek work after they’ve left their employer. The bill’s backers—and now Spark—say that such clauses, which are extensively used in the technology industry to keep employees from setting up competing businesses or going to work for competitors, are bad for workers and bad for the state’s overall economy. They argue that in states such as California, where non-compete clauses are unenforceable, there’s more innovation because employees have more freedom to move between companies or start their own.

“As a Boston venture capital firm, we are always looking to propel innovation across the Commonwealth, and to strengthen Massachusetts’ global competitiveness,” Spark general partner Bijan Sabet said in a press announcement today. “Through several discussions and planning sessions with State Representative Brownsberger, it’s clear that employment non-competes are stifling the emergence of promising young companies in our state, forcing some of our most innovative entrepreneurs to leave in favor of more open corporate environments. The success of Silicon Valley, which does not legally enforce non-competes, is a prime example of how emerging startups are allowed to thrive.”

Most opponents of non-compete clauses say other mechanisms such as non-disclosure agreements and trade secrets protections are sufficient to keep employees from using a firm’s own intellectual property against it. The Brownsberger-Jehlen bill wouldn’t affect non-disclosure agreements, and Spark says it still supports them. But Spark stopped requiring its portfolio companies to impose non-compete agreements on their employees back in 2007.

Brownsberger’s bill was filed January 12. A hearing on the bill is expected to be scheduled this spring. A competing bill filed by State Representative Lori Ehrlich, House Bill 1799, would modify state law regarding non-compete clauses, but would not eliminate them; Ehrlich’s bill makes non-compete agreements unenforceable for employees whose yearly salary is below $100,000 and limits the term of the agreements for other employees to two years.

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Massachusetts venture investors have long taken heat for the perception, at least, that they shy away from very early-stage (read, risky but potentially game-changing) investments—and many folks have pointed to a relative dearth of venture firms that specialize in seed-stage plays.

In recent months, though, there seems to be a definite uptick in interest in early-stage investments. In February, Wade wrote about the Boulder-CO-based TechStars startup boot camp coming to Cambridge. And just yesterday, we carried the news about Boston’s Spark Capital and its new startup seed fund.

On the heels of the Spark announcement, another venture firm in the early-stage arena, Cambridge, MA-based LaunchCapital, announced its latest round of seed investments. Ryan profiled the firm back in January, and LaunchCapital, as we have disclosed, was an investor in Xconomy’s Series A-1 round last November. The firm, which has offices in New Haven, CT, and San Francisco, in addition to Cambridge, specializes in smallish investments—averaging around $125,000—across a variety of industries. And Elon Boms, a founder and the managing director of LaunchCapital, told Ryan the firm typically makes its decision within 10 weeks of hearing the first pitch (yeah!).

Yesterday’s announcement covered six startups—five in New England—the company has invested in over the past three months. In alphabetical order, they are:

—Cardiophotonics (New Haven, CT) — Develops non-invasive blood monitors used to detect cardiac arrhythmia and dehydration

—FMP Products (Greenwich, CT) — Laboratory automation equipment and related software—initially in fields of sample processing, imaging, and liquid handling—designed to increase researcher productivity

—Helix (Guilford, CT) — DNA therapeutics

—iTeam (Westford, MA) — Seeks to simplify IT and audio/visual installation through Software-as-a-Product model

—SafePorch (Dunnellon, FL) — Like the name sounds, offers specialized storm shelter products in hurricane prone regions of the country

—Vigix (Cambridge, MA) — Next generation kiosk technology for self-service retail sales

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