In William Gibson’s 1984 cyberpunk masterpiece Neuromancer, the hero Case lives in a near-future place called BAMA—the Boston-Atlanta Metropolitan Axis, aka the Sprawl, a giant city that has spread Coruscant-like across the whole eastern seaboard. (If it had extended to Orlando, maybe Gibson could have called it OBAMA.) But while this part of Gibson’s sci-fi dystopia may have seemed plausible in the 1980s, it’s a little less so today. Yes, cities are still dealing with the consequences of the mid-20th-century’s automobile-driven sprawl—but if anything, the big metropolitan regions in the U.S. today are contracting around the edges, not blurring into one another.

And once the cheap oil runs out, analysts like James Howard Kunstler argue, cities will have to get smaller yet. The future “will be much more about staying where you are than about being mobile,” Kunstler predicts. Unless there’s a miraculous advance in solar-electric vehicle technology, or the government suddenly decides to invest a couple trillion dollars to build a serious passenger rail network, it’s hard to see how he might be wrong.

But that’s just one side of the picture—the physical reality of freeways and suburbs and Wal-Marts. There’s another trend at work that’s erasing what I would call the mental boundaries between cities. That trend, obviously, is digital networking.

It’s a tired cliché to say that telecommunications technology is breaking down the meaning of geographical distance. People have been pointing this out since the advent of telegraphy in the 1840s. What I’m saying is a little more radical. Given today’s work styles and networking tools, information workers can be anywhere. It makes very little difference whether your software engineers or QA testers or telesales representatives are in Boston or Burlingame or Bangalore. In fact, it’s easier to send an e-mail or an instant message to a colleague 3,000 miles away than it is to get up and walk a hundred feet across your office.

Which means distributed teams can get the same amount of work done as concentrated ones—probably more, thanks to the planet’s rotation and the single most important invention of 1883-84, the division of the globe into 24 standard time zones based on Greenwich Mean Time. In effect, the world’s information workers all live in one giant city—a mental space where Gmail and Twitter are more important than parking garages and subway tunnels.

Which makes one particular strain of inter-city bickering all the more inane. Over the last few years, I’ve listened to endless arguments about whether New York or Silicon Valley or Boston or insert-your-favorite-city- here is the best place to be an innovator, find investors, hire engineers and salespeople, and grow a technology company. In Boston, people still wring their hands over why Mark Zuckerberg moved Facebook to Palo Alto. In Silicon Valley, meanwhile, people glance nervously over their shoulders at New York. Recently, in fact, there’s been an extended and entertaining kerfuffle over New York’s merits as a startup hub, involving, at various points, SpeakerText CEO Matt Mireles, Hunch and Founder Collective co-founder Chris Dixon, Flickr and Hunch co-founder Caterina Fake, Y Combinator founder Paul Graham (see 2:30 in this video), and AdGrok co-founder Antonio Garcia-Martinez. Dixon, Fake, and Graham think New York’s tech scene is exploding with cool startups and “ambitious ass-kickers,” and that it’s becoming an easier place to find angel or venture financing and engineering talent. Mireles and Garcia-Martinez, on the other hand, think that New York is expensive and elitist, that the angels and tech-focused venture firms are still few and far between, that Wall Street sucks up all the talent, that the city lacks decent engineering schools, and that New Yorkers are generally hustlers rather than builders.

It’s all beside the point. Regions have their distinct flavors, of course, but in the end, none of this affects the global pace of innovation, which depends on people and their ideas much more than their locations. Does anyone seriously want to argue that Google would not exist if … Next Page »

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For the first time in as long as I can remember, IPOs dominated the New England tech and life sciences deals news this week.

—Glasshouse Technologies, an IT consulting firm in Framingham, MA, indicated in an SEC filing that it’s planning an initial public offering worth as much as $75 million. Glasshouse, which is aiming to trade on the New York Stock Exchange under the ticker symbol GLAS, had abandoned a previous attempt to go public back in March 2009.

—BG Medicine also revived its IPO ambitions this week, after nixing an $80 million offering in January 2008. The Waltham, MA-based developer of molecular diagnostics is now proposing to raise as much as $86.3 million to help bring its test for heart failure to market in the U.S. and Europe.

—The much-anticipated initial public offering from Cambridge, MA-based Ironwood Pharmaceuticals (NASDAQ: IRWD) priced below its proposed range of $14 to $16 per share on Tuesday, with 16.67 million shares going for $11.25 apiece. The stock’s price climbed modestly on its first day of trading, closing the day up 3.6 percent at $11.65.

—In non-IPO news, Westford, MA-based BioBehavioral Diagnostics raised $10 million in a Series B financing led by Sevin Rosen Funds and Tullis Dickerson. The startup intends to use the funds in part to expand sales and marketing efforts for a system used to diagnose attention-deficit hyperactivity disorder.

—Software maker Vivox of Natick, MA, raised $6.8 million in a third round of venture financing led by new investor IDG Ventures SF and joined by return investors Benchmark Capital, Canaan Partners, and GrandBanks Capital. Vivox’s technology allows gamers and inhabitants of virtual worlds such as Second Life, EVE Online, and EverQuest to talk with each other over the Internet.

—Unica (NASDAQ:UNCA), a marketing software firm in Waltham, acquired the MakeMeTop search marketing business from UK-based Microchannel for an undisclosed sum.

—Robotics startup CyPhy Works raised $1.75 million in a round of equity financing, according to an SEC filing. The Cambridge-based startup is led by iRobot co-founder Helen Greiner.

—Lexington, MA-based 1366 Technologies, a developer of more efficient photovoltaic panels, nabbed $5.2 million in a Series B financing round, according the company’s president, Frank van Mierlo. North Bridge Venture Partners and Polaris Venture Partners provided $5 million of the funds and members of 1366′s management provided the rest, van Mierlo said.

—Cancer therapy developer Syndax Pharmaceuticals of Waltham collected $9 million of a planned $16 million in an offering of equity, options, and warrants, according to regulatory filings.

—Newton, MA-based Powerhouse Dynamics, a developer of home energy usage monitoring tools, closed a $1.02 million financing round. The deal was led by Lexington-based CommonAngels.

—Tepha, a Lexington-based maker of polymers for medical applications spun off by Cambridge-based Metabolix (NASDAQ:MBLX), raised $3 million in an equity financing, according to an SEC filing. The deal could eventually total $7.4 million, the filing indicates.

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There has been a lively debate following Scott Kirsner’s Innovation Economy blog “Why Waltham Doesn’t Matter.” One of the threads is whether it matters if entrepreneurs and VCs are physically concentrated close to each other.

It should not matter where a VC’s offices are located. Good VCs and entrepreneurs will find each other. Andrew Perlman, who co-founded several local big successes, including Coatue, Sirtris, and GreatPoint Energy, in my observation is almost never in his office. He is out meeting investors and other potential collaborators wherever they may be. On any given day someone like Andrew may be found in his Cambridge office, or at a coal mine in the midwest, or in a place like Novosibirsk, Russia’s science city, where he acquired some of the core technology for Coatue.

This can be true for VCs as well. Based on how often I see Bob Metcalfe outside of his Polaris Venture Partners office, I’m not convinced he has one. Celebrated West Coast VC Vinod Khosla has had no trouble investing in young companies in the Cambridge area, such as iSkoot, Mascoma, and GreatPoint Energy.

But these are our superstars. Many of the rest of us find it hard to make connections. This is particularly true for newcomers, such as the roughly 3,000 new arrivals at MIT each year. They may be amongst the smartest people in the world, but they don’t know anybody and they often have limited social skills. How has this group of people consistently pumped out some of the world’s most important technology companies?

This is where the density of Cambridge kicks in. People working and studying in and around Kendall Square meet constantly and informally: at myriad talks at MIT where you are likely to run into a Nobel Laureate, at gatherings we can walk to after work before heading home, in the hallways of our tightly clustered buildings of powerhouses like Google, Microsoft, Akamai, Genzyme, Novartis, and Biogen Idec, at local watering holes like the Muddy Charles, and at loosely structured meetups, such as those at Bijan Sabet and Nabeel Hyatt’s OpenCoffee Club at Café Andala in Central Square. These chance meetings are where a bright kid from Israel gets urged to start a company, how a new entrepreneur first “clicks” with an investor, how an investor helps find a great CFO for that entrepreneur, and how a lawyer offers to kick in the time to get it all incorporated. Stuff happens here, and this is why Cambridge matters.

We tend to take this for granted, and we miss its importance. Anyone who has spent time in other science and technology regions, such as Cambridge (England), Shanghai, or Silicon Valley knows that those places are spread out and broken up. Key labs, companies, and universities are so far apart that getting together may mean a two-hour car drive.

How do we make the most of this unique structural advantage? There are many great role models out there. Joost Bonsen, another Xconomist, helped create MIT’s $100K business plan competition, which galvanized current students at MIT to think about startups, and created a movement which spread to many other universities. He also helped create TechLink, a group that organizes mixers between different departments at MIT, and which helped MIT become a better collaborating university at the student level. Desh Deshpande created the Deshpande Center for Technological Innovation at MIT, getting capital and help to individuals with exceptional nascent ideas. The British Consulate, and later and on a grander scale, Microsoft, opened beautiful meeting facilities next to MIT where networking groups were welcome to hold their events. Jeff Bussgang and his colleagues at Flybridge Capital Partners created Stay In MA, which helps students cover the costs of attending local professional conferences. Some of us are working on a project called Venture Café, which seeks to create a different type of ‘center’ in the center of Kendall Square.

Coming back to Scott’s blog post, I don’t believe it matters if you are a VC in Boston, Cambridge, or Waltham, or if you are a company, a city government, a university, or simply an individual who cares about innovation. The way to matter is to contribute to building and strengthening your community in the ways you can. Pick an initiative and run with it. If it doesn’t work, try something else. You will make a difference, and at the very least, perhaps Scott Kirsner won’t get on your case.

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Our Seattle compatriots have all arrived in Boston for XSITE. We wish we could say they brought the rain with them, but in fact, Boston has been far wetter than Seattle all month. The week’s life sciences news, however, isn’t quite the downpour you’ve all been dealing with outside.

—Wide-roaming correspondent Ryan McBride took in some sea air while attending the Convergence conference in Newport, RI. Policy wonks abounded, as the health care industry is nervously awaiting changes to federal patent standards, generic biotech drug regulation, and healthcare coverage. Ryan gathered insights on GlaxoSmithKline (NYSE: GSK)’s purchase of Cambridge, MA-based Sirtis last spring from Genzyme (NASDAQ: GENZ) CEO Henri Termeer’s account of a conversation he had with Sirtis CEO Christoph Westphal. For all this and more, check out his report.

—Ryan also profiled PubGet, a Cambridge-based scholarly search engine aiming to provide faster, more useful results than the likes of GoogleScholar and PubMed. Instead of clicking through multiple links to get to the paper, a PubGet search will take you directly to a full-text PDF (assuming your institution has access). PubGet’s just announced that 50 research institutions have adopted its service.

—Marlborough, MA-based Exact Sciences is going back home to where the buffalo roam. The colorectal cancer test maker is relocating to Wisconsin after securing a $1 million loan from the Badger State.

—ImmunoGen (NASDAQ: IMGN), which produces technology to aid the effectiveness of antibody drugs, raised $33 million, after expenses, through a stock offering. The Waltham company sold 5 million shares at $7 apiece.

—Cambridge’s Living Proof, which aims to apply advanced materials science to beauty products, raised $9 million in an equity financing round. The funds came from Polaris Venture Partners, the sole venture backer of the company. Living Proof recently debuted its first product, the hair treatment NoFrizz.

—I-Therapeutix, a Waltham-based maker of tiny hydrogel-based eye bandages, landed $15 million in venture capital during a Series C Financing round. Between this latest news and the recent clearance of its flagship product, the I-Zip bandage, in European markets, I-Therapeutix is sitting pretty. The company hopes to enter the American market early next year, and is currently batting its lashes at the FDA.

—Norwich Ventures sounds like a great boss to work for. The Waltham venture firm loves to invest in medical device companies at an early stage, and unlike other, larger players, doesn’t pressure companies in its portfolio to sell or exit within five years. Hear more about their strategy in Ryan’s piece here.

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Waltham, MA-based Proteon Therapeutics, which specializes in drug development for kidney and vascular diseases, announced today that it has completed a second closing for its Series B equity financing round. $12 million primarily came from new investors Bessemer Venture Partners and Devon Park Bioventures, raising the total for the round to $50 million.  Vectis Healthcare & Life Sciences Fund, MPM Bio IV NVS Strategic Fund L.P., TVM Capital, Skyline Ventures, Prism VentureWorks, and Intersouth Partners participated in the first closing back in March. At that time, Proteon also inked a deal with Novartis to give the Swiss drug giant the option to acquire the company following successful Phase 2 trials of its leading product, PRT-201, which is intended to help ease surgery for dialysis patients. We’re coming down with a serious case of deja vu over here…

[Updated at 3:00pm to clarify the details of the two separate closings.]

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Software developer Aveksa, based in Waltham, MA, announced today that it will open a headquarters for Europe, the Middle East and Africa in London.  Aveksa’s business is “enterprise access governance solutions”–in other words, controlling who has access to what information inside a company.

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When was the last time you had a spare 45 minutes to sit through a telephone survey or to take part in a focus group? Finding willing participants for traditional market research studies is getting increasingly difficult, but Invoke Solutions of Waltham, MA, gets around the problem by shifting market research to the platforms where people are focusing more and more of their attention: the Web and mobile phones. And today the company announced that it’s picked up $7 million in new venture funding to build out its technology and pursue new customers.

In January, the nine-year-old company rolled out a new family of products called Engage that allows real-time interaction and feedback between panels of consumers participating in Web-based surveys and marketing experts from the companies sponsoring the surveys. For example, clients using the Engage Live Web-based system can watch participants’ answers to multiple-choice or open-ended questions as they come in, add questions on the fly to drill deeper on specific issues, and open direct chat sessions with individual participants. All of the information survey participants provide is captured in Excel and PDF reports.

The company’s InvokePing service, meanwhile, hits volunteers with survey questions right on their mobile devices, while they’re still inside a store or restaurant. Customers opt in by texting a message to the short code displayed on an in-store sign. They’re then sent a few questions via text message; after about 5 minutes, they get a reward such as a discount code. Study results accumulate on a Web-based dashboard available to store managers.

The company partners with research firms like HarrisInteractive and the Gallup Organization to design its surveys, and has worked with a range of Fortune 1000 customers such as Microsoft, Washington Mutual, Conagra, Dell, and Nestle. North Atlantic Capital, an expansion-stage investor based in Portland, ME, led the new funding round, which also included existing investors Bain Capital and BEV Capital.

“Our new Engage Family of Solutions is being quickly embraced by our partners and customers, both in the U.S. and in Europe,” said Invoke president and CEO Ben Cesare in a company statement published today. “This funding from North Atlantic Capital and our existing investors enables us to keep growing across the entire organization in order to scale the business in 2008 and beyond.”

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Lionbridge (NASDAQ: LIOX), a Waltham, MA, “localization” company that translates English-language software, software manuals, online support materials, websites, and other product documentation into other languages, said today that it plans to buy back $12 million worth of its own common stock in 2008. That’s on top of $12 million in stock already purchased since the company’s board authorized the repurchase program in September 2007.

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In the world of Web advertising, targeted audiences are gold. If you publish a website that attracts the type of people who drink green tea, then click-through rates for green-tea ads are probably going to be higher than average, and companies like Snapple and AriZona Beverages will happily pay you a higher rate. Likewise, if you know that a lot of CIOs or office managers read your site, you can probably use that information to attract ads from the likes of Dell or Staples.

But how can you really know who’s visiting, in a way that you can prove to advertisers? A Waltham, MA, company called ZoomInfo says it has come up with a way. The company’s core asset is a collection of 40 million profiles of people in the business world, culled automatically from information scattered around the Web. (In fact, you might be surprised how much information ZoomInfo has on you—but more on that later.) When those people arrive at sites that use ZoomInfo’s advertising service, the company’s software can identify them, link up their names with their ZoomInfo profiles, and serve ads customized for people in their specific job categories.

“Say you’re a B2B advertiser, and you want to reach out to directors of IT,” explains Bryan Burdick, ZoomInfo’s chief operating officer. “We have 100,000 people with the title ‘Director of Information Technology’ in our database, and we’ve been able to, in essence, tag them. So if you are one of those directors of IT and you happen to be visiting any of the sites in our network, we can target an ad based on your business demographics”—or what Burdick calls your “bizographics,” for short.

In a way, ZoomInfo’s service is similar to the consumer-oriented “behavorial targeting” services offered by Tacoda and Revenue Science. But there are two big differences. ZoomInfo’s service is aimed at people in business roles. And thanks to its profile database, ZoomInfo can target Web surfers based on a highly informed guess about their job title and responsibilities—not just based on which websites they’ve visited recently or what subjects they search for, the way Tacoda and Revenue Science do.

So far, ZoomInfo’s ad-targeting service is a small beta program, but Burdick says he expects the program to expand quickly in 2008. It’s the third and most experimental revenue stream for the company, which was founded eight years ago by CEO Jonathan Stern as an outgrowth of his previous venture, CardScan.

I’ve used CardScan’s system extensively, and I’m thankful for the way it takes over the mind-numbing work of transferring information from all the business cards I collect into my electronic address book. The way Burdick tells it, Stern realized in the late 1990s that … Next Page »

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If you’re a budding Boston entrepreneur working on a technology such as deeper data mining, longer-lasting batteries, or faster microfluidic DNA screening, you might get a surprise phone call one day soon from the U.S. intelligence community—or at least, from its strategic investing arm. That’s because In-Q-Tel, an Arlington, VA-based private, non-profit group that funds early-stage technology ventures on behalf of the Central Intelligence Agency and other U.S. intelligence organizations, has come to town. It’s just turned on the lights at its new Waltham office, and it’s on the lookout for Boston-area startups with technologies that could help the nation’s spies and intelligence analysts do their jobs better.

It’s not that Boston has eluded the intelligence agencies in the past—the region is already home to 13 out of the 120 companies In-Q-Tel has funded since its creation in 1999, including Basis Technology, BBN Technologies, Ember, Endeca, Metacarta, Polychromix, Sionex, Spotfire, and Traction Software. But Ben Levitan, a new partner brought on by In-Q-Tel this April to help open the Boston outpost, says “that percentage is about to go up a lot.”

Levitan agreed to meet me for coffee in a snowy Harvard Square yesterday afternoon. With him was Donald Tighe, In-Q-Tel’s vice president of external affairs, who was visiting from Virginia. I’d first met Levitan in an unusual setting—a dinner discussion about virtual items and virtual economies hosted back in October by David Beisel of Cambridge venture firm Venrock—and he’d hinted to me then that In-Q-Tel would have some news in the next few weeks. Over cappuccinos at Legal Sea Foods, Levitan and Tighe told me that the organization has been cultivating local contacts behind the scenes for some time, and that they’re now finally ready to start spreading the word more widely about In-Q-Tel’s presence here.

In-Q-Tel’s mission is to scout for young companies where engineers are working on technologies intelligence agencies might want, but need help getting these technologies off the ground and adapting them for the government’s specific requirements. The organization provides seed money of up to $3 million, as well as a crash course in the structure and requirements of organizations like the CIA, the NSA, or the National Reconnaissance Office. Most often, In-Q-Tel doesn’t even ask for an equity stake in return. “We’re not looking for ‘deals.’ We’re looking for solutions to problems,” says Levitan.

Those problems fall into five specific areas: application software and analytics; bio- and nano-technology … Next Page »

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Waltham, MA-based Dace Ventures, founded by former CMGI President and COO Dave Andonian, announced the closing today of its initial investment fund of over $70 million. The firm focuses on digital media, consumer marketing and mobile services companies whose products are approaching mass commercialization. Its portfolio companies include auctionPAL, CityVoter, Panraven, LocaModa, and (just announced today) Vitrue.

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