Cytokinesis at Atlas Venture: bio and tech take off
Atlas Venture announced at his latest annual meeting that the biotech and tech groups were going their own way. Since I did spend ten years there, let me give you my view on it.
Aligned, yet different
The two groups had a ton in common. Both are laser focused on early stage and have espoused a model of being super capital efficient and lean early and supporting hard and fast scaling once companies show promise.
Both groups have been innovating for a few years now in adapting fast to changing market conditions, with biotech showing the way in "asset light" and virtual companies and the tech group in pushing a high-velocity seed approach and more recently spearheading the development of Angellist Syndicates in Boston.
But as these strategies indicate, the rapid market evolution especially in tech meant the models were rapidly drifting further apart. Whilst the biotech guys would go very deep on macro themes and groundbreaking science and literally engineer companies around the most promising areas, often taking interim operational roles, the tech team was all about finding the most promising entrepreneurs as early as possible and letting them rip.
Whilst both approaches aim to "bend the risk curve", you can see that operationally it gets pretty diverse. Whilst the ability to allocate reserves across sectors once the fund matures and punch above your weight on some investments (Veracode, Zafgen, Zoopla to take fund VII examples) is attractive, it does not really justify keeping the franchises meshed.
The biggest difference, as correctly identified by Dan Primack in his article, is that Biotech is really tough to run with small funds (Bruce Booth indicates a $265M standalone target for Bio Team) whilst in Tech we thrive on it. For our side of the business, small(er) really is beautiful.
What, no name ?
Over at BetaBoston, Dennis drops a nice little sub-headline ("The Firm with No Name"), since the Biotech boys will keep the brand. It's a fun dig and he's right to raise the question ("if it's been planned, why isn't the name ironed out ?").
I wasn't in the room when the brand question was discussed, but I think I know my partners quite well and can guess what's going on. Both teams are feeling pretty good about themselves right now and confident in what they are doing, so they are happy to announce the split at the annual meeting as soon as the decision is made.
Tech Team, having successfully reinvented itself, thinks a new name might actually be fun and crystallise the reinvention, whilst Bio Team, feeling good about its model and performance too, likes the continuity that it provides in an environment where new managers are few and far between.
Happy / Sad
I'm really delighted I joined Accel and am having a blast. I would lie if I didn't tell that I miss New England and my old partners, and that a part of me wishes I was part of this new chapter. I'm equally excited for my buddies JF, Bruce and Peter over on the Bio side, and as you can see from Bruce's blog, he is too.
Godspeed, my friends.
PS Yes, yes I'm aware FierceBiotech used mitosis but I came up with the idea first under the shower this morning so I kept it.