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Matrix Partners opening a branch office in Kendall Square this summer

Posted by Scott Kirsner  June 8, 2011 08:40 AM

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101main.JPGHere's an unusual spin of the revolving door: a biotech venture capital firm decamps Kendall Square for new digs in Wellesley, and the new tenant in their old space is a tech-focused venture capital firm from Waltham setting up what you might call an exploratory outpost in Cambridge.

Matrix Partners, the Waltham venture capital firm that has backed companies like Apple, Netezza, Apollo Computer, and HubSpot, is setting up a "branch office" in space at 101 Main Street occupied until last month by BioVentures Investors.

The Matrix Kendall Square Project is being spearheaded by partners David Skok and Antonio Rodriguez (pictured below). The new space will serve as home base for a new series of events for entrepreneurs that the pair have dubbed Startup University. While Matrix isn't vacating its Waltham offices atop lofty Mount Money, the Cambridge foray could lead to a wholesale move of the firm in the coming years. (Rodriguez and Tim Barrows, another Matrix investor, both live in Cambridge.)

The new Kendall Square space, totaling about 3,000 square feet, will have offices for the four partners who normally work out of the Waltham office, but there isn't sufficient room for the rest of Matrix's support staff. It will, however, have a "living room" area for casual hang-time; two conference rooms; desks for two or three start-ups that Matrix is supplying with seed capital; and event space big enough for groups of 40 to 50 people. Skok says the first start-up to use the space will likely be GrabCad, an Estonian start-up that has been participating in the TechStars Boston program, which wraps up next week.

matrix.jpgOf Kendall Square, Skok says, "This is the area that's the real hub of things that are going on with the community," though he believes that significant companies will still get started and built out in the 'burbs.

He and Rodriguez hope that their free Startup University series of events will help newer entrepreneurs build their skill sets. "We think that there are plenty of great events are Boston, but they're somewhat random," Skok says. "They miss some of the learnings that start-ups need to have, which are not taught at universities. TechStars does some of this, but they also take six percent of your company in return. We're thinking about topics like learning to hire, search engine marketing and search engine optimization, managing engineers, and customer acquisition." Already signed on to serve as adjunct lecturers at Startup University are local entrepreneurs like LogMeIn CEO Michael Simon, Performable CEO David Cancel, Constant Contact CEO Gail Goodman, CloudSwitch CEO John McEleney, and HubSpot CTO Dharmesh Shah.

Matrix hopes to occupy the new Kendall Square office next month.

One Matrix-backed entrepreneur told me earlier this week that he views Startup University and the new space in Cambridge as a significant make-over for Matrix, which has the reputation as a straight-laced, supremely-logical investor in communications and IT companies, many of which sprouted along Routes 128 and 495. "I think they recognize that they have to change the persona of the firm and the center of gravity," this entrepreneur said, adding, "I do think the longer-term direction of the firm is to move" completely into Cambridge.

Some say that VCs are herd animals, and Matrix Kendall Square is part of a definite trend among suburban venture capital firms to cozy up with city-dwelling — IE, younger — entrepreneurs. (I see it as a positive migration, helping to amplify the entrepreneurial energy of Boston and Cambridge, though some have observed that it'll also drive up rents.) Among the firms who've left or are planning to leave the western 'burbs for Cambridge are Highland Capital Partners, Greylock Partners, Charles River Ventures, Advanced Technology Ventures, Atlas Venture, and Bessemer Venture Partners.

I asked Brian Halligan, chief executive of HubSpot, an East Cambridge company in which Matrix has invested, for his take on the move. He wrote via e-mail:

It actually doesn't make much sense, but traditionally, our great companies were based on the strip of land between Route 128 and Route 495: DEC, Wang, PTC, EMC, Sycamore, etc. The reason it doesn't make much sense is that much of the creative energy pours out from Cambridge.

More recently, it feels like the center of entrepreneurial gravity has palpably shifted from that 128 to 495 belt to Cambridge, Boston and Somerville. It actually makes a lot more sense that it would happen in the city like it is today. To that end, it makes perfect sense that Matrix move into Cambridge to be nearer the startups.

Ironically, [HubSpot co-founder] Dharmesh [Shah] and I had a meeting out on Winter Street [in Waltham] yesterday, and on the way were talking about how a lot of the interesting folks starting companies now are in Cambridge, Boston, and Somerville — and how most of them don't have cars. It must be a pain in the backside for them to figure out how to get out to Winter Street for the myriad meetings out there.

Skok says that Matrix is adding new investing partners in Massachusetts, New York, and California. Matrix is currently investing out of a $600 million fund it raised in 2009.

Rodriguez notes that the firm was founded in Boston's Financial District (like most other first- and second-generation VC firms), but was among the first to move to Waltham in the early 1980s because founder Paul Ferri "was funding entrepreneurs in minicomputers and workstations, and he realized that it was a competitive advantage to be the venture fund you could go see with a short drive and without having to pay for parking. Within a few years, they all followed him and thus was born Mount Money."

I spoke this morning with Peter Feinstein, one of the founders of BioVentures, the old occupant of the Matrix Kendall Square space. Why'd the firm move from Cambridge to Wellesley? "The rents were getting very high, and my two partners live out here," Feinstein told me. Founded in 1999, the life sciences and healthcare-oriented firm had always had a home in Kendall Square. But while Feinstein misses it, he says, "The value of being in Kendall Square wasn't as high as it was in the past, and it's only a 20-minute drive into Cambridge from here. I don't think it's going to make a big difference."

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Scott Kirsner was part of the team that launched in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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