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Everybody to please take a seat and we will get the program going. My name's Greg Torres and the president amassing. And the publisher of our civic Journal journal Commonwealth magazine and I would like to welcome everyone and thank you for joining us. I'm going to give you just a little rundown on the program and then we're going to get started. I'll make a couple of opening remarks. Then I will turn it over to Andy tarsi who's the head of the progressive business leaders network executive director and co-founder. For that matter will say a few words. They are our co-sponsors for this evening and now. And I'll tell you a little bit about their organization and next. Kiki Mills who is the president of the mass innovation and technology exchange will come up to introduce Jeff Jeff will speak for about 20 minutes on his book

and take questions for about 15 to 20 minutes. And so I encourage everyone to get into that portion of the program that is usually in our experience the best part about this program. So a little better. Can you hear better now. Thank you. And very very important point you can make. Drink orders at any point in the evening and after the Q&A session we're going to move I believe to that room back there. We have copies of Geoff's book. I think Jeff has agreed to stick around maybe sign some books and also just chat and catch up and keep the discussion going if you so desire. So please feel free to join us for the reception. Now just a word about this series that Massignac runs this author series. This is something we kicked off about what eight months ago March. And we've had a number of authors authors come through.

Steve Greenhouse is the labor reporter for The New York Times who wrote the book The Big Squeeze about the plight of the American worker and today's economy was with us. Paul Tough also from the New York Times who wrote the book whatever it takes on Jeff Canada's work in the Harlem Children's Zone was with us. John Gillespie wrote the book Money for nothing which I think is one of the better books on corporate governance or lack there of to come out in recent years. It's a book about corporate boards and public company boards and what they didn't do during the recent meltdown coming up or this evening and in the next one we're going local. So we gone with local authors Jeff tonight and then in September on September 8th I believe we will have Alan cazy who's written a book called Big citizenship. It's not out yet but we will we will host Allen

right about the time that his book comes out. And then finally in November and Kornbluth the White House correspondent for The Washington Post we're going back to the national scene on her book Notes from the Cracked Ceiling which is about the 0 8 presidential race. From the perspective of the Clinton campaign and the Palin campaign and so on. So please stay tuned if you enjoy this evening. Sign up for upcoming events spread the word. We're always trying to get new people into into our events. OK. One other thing I wanted to mention to mention we've Messinger potions Commonwealth magazine. This is a an example of something we do once every couple of years. Most of you know come with magazines quarterly publication comes out four times a year once every 18 to 24 months. We do this through a special issue an in-depth issue on one matter of importance to the Commonwealth.

We've done it on development and economic development we've done it on health care this year it's on energy and the environment. The headline is green power. Can it really create new jobs. Curb greenhouse gases reduce our reliance on fossil fuels. Save us money and keep the lights on. This will be out Marjan Lauren Tuesday of next week I believe. And I really encourage you to pick this up. I can say this because as publisher I have absolutely no control whatsoever over editorial content. The editors and writers did a phenomenal job on this issue. It is a very very important issue long form journalism at its best. So if you get a chance next week keep an eye out for it if you're not on our mailing list get on our mailing list we'll make sure you get a copy it's coming out as a companion to our summer issue. OK enough of the commercial. Let me do this.

Most of you know Andy tarsi anti-Tory. He's very well known around this community many of us know him from his work with the Anti-Defamation League which he ran out of New England which he ran for about eight years or so. We know him from his work with Facing History and ourselves and now we know him as the executive director of a very interesting relatively new organization called the Progressive Business Leaders Network. Please welcome our co-sponsor for the evening antitoxin Thank you Greg. Thank you very much Greg and everybody for coming out to learn from from Jeff so without risking standing between us all in that experience of just just two thoughts one is to introduce the idea of progressive business leaders network which some of you may not have heard of yet and the idea is really to bring business leaders CEOs and other top executives

further out of their comfort zones and into the public fray around the urgent issues that define what we like to call inventing a more sustainable more competitive economy. And what that means is that as one of our members has said and I think this mirrors the vision of mass sink in in a very powerful way is we can no longer afford a distinction between what is good for business and what is good for society. I suppose we never could. But we allowed it and we have allowed it to drive the agenda. So to some extent one of the members of our organization recently said to me and again these are often people who have no knowledge of policy. Greg spent a lot of time with us and we you sort of watch people's eyes open to the context in which their businesses grow. And he SOTA said to me I realized that if I'm not on the field someone is playing my position. And that in this in a nutshell is the essence of what we're trying to do it's not just to rearrange the chips but it's to bring whole new.

Voices and a lot of those are coming from the entrepreneurial community. So that's what we do. And in a sense the intellectual matter that we want to organize around comes from no one more than it will from massing. And so the generation of ideas in order to bring business leaders to new ideas and get them to put their fingerprints on it. But then to bring it out into the discussion with some of the credibility they bring is really part of the vision and that's why we've been working so closely getting to know each other and I think Big things ahead in partnerships. So that's that piece. The second thing I wanted to say which leads to Jeff is is that what unifies I hope our work. But certainly what unifies Massignac and Jeff plus gang is is one word and it's ideas wherever Jeff is working on what he focuses in on is what's the idea here. And he does it very gently Some people are very abrupt in trying to get you to focus and you feel a little bit like they didn't want to hear your story. Jeff makes you feel comfortable but he's no less focused. What is

the idea and then and move other things out of the way and and really grow it. And in a sense he'll tell you that tonight in terms of what he's writing about and how he sees some of these entrepreneurs. But it's really the way he approaches his entire portfolio of out of commitments from social justice to education building new organizations refurbishing older ones. And I think that's what you'll get from Jeff tonight. And and so when we think about organizing the business community we need to remember that it's not just Although there's nothing wrong with it these incumbent industries you know it's not always all about what's happening at State Street Bank or Raytheon. There's an entire population out there and I like to say sometimes they may not even be Red Sox fans. And and that's going to have to be OK because they're taken over and their ideas taken to scale are going to transform our society. So let's go through Jeff. See them you know as our future allies and let's get them to work

as soon as Jeff tells us who they are and how they think and how to engage them as if they were. You're an anthropologist for us in some ways. But mostly I wanted to say thank you and hello and just look forward to meeting folks and being with you. So thanks. To the Massachusetts innovation in technology exchange is the nation's largest trade association for the digital marketing media and technology industry. To introduce Jeff please welcome its president Kiki Mills. Thank you. I'm very honored and thrilled to be here. My organization my tax represents a community where Jeff is a very vital part of our ecosystem. And as you all know and this is through my filter at the commercial Internet has nine been around for 20 years in really kind of in people years is still kind of an awkward teenager.

And what we've all witnessed tio let alone over the last two years and it and in the last decade it's pretty mind boggling. And a lot of that has been possible it would not have been possible without Jeff and his and his counterparts who have been funding a lot of those companies that have been driving the advancements in the in the Internet revolution. And you know when you hear some of his facts like 12 percent of the workforce are venture backed companies and those companies contribute 20 percent of total business revenues in the United States. I mean these are very important proof points. Why Jeff and the venture capital industry is critical to the ecosystem here. And what's even more important is that the lens through which Jeff tells this story because he's walked in both sets of shoes and that's really critical to an entrepreneur who I see day in and day out in my organization many of which are bootstrapping they have a second job. They just have this dream or vision. And Jeff's book provides a really needed roadmap for those entrepreneurs to understand

how to get there. So without further ado I'd like to introduce Jeff. He's the general partner of flybridge Capital Partners which is actually a couple of streets down here and have under $500 million investment a capital investment excuse me. He's the co-founder of the progressive Business Leaders Network. He started his started his career but he is most well known as the co-founder if you promise which is as he was in his entrepreneurial career before getting into venture. And last but not least a very valued member of my board. So please welcome Jeff. Thank you. This is terrific. Can you hear me OK with this is this too loud or just right. Just right as the bourbon starts to flow. I suspect we may have to ramp it up. But I'll lower it a little bit here. Well this is a terrific honor to be here. And great fun in the presence of mass I think. And Greg kicky and my son Andy and

PBL and because those are three such critical organizations for the Massachusetts business and community ecosystem. So thank you all very much for being a part of this and giving me the chance to speak to you all about this book I wrote. I will. Just take a few minutes to tell you a little bit about my journey and how I ended up writing this book. I'll tell you a little bit about what's in the book. And then we can just take questions and talk about whatever you want to talk about with respect to the entrepreneurial ecosystem. I'm going to keep lowering this until the feedback reduces that better. Okay great. So. You know the idea since Andy mentioned I'm big on ideas the idea for this book and the inspiration in many ways started on September 1st 1939. Now that's your cue for saying. You don't look that old. How is that possible. Thank you. I always need one of you in the

audience. But if you know the history of Eastern Europe you know that was the day that the Nazis invaded my father's homeland of Poland. And sent him on a journey of escaping the Holocaust as a refugee and soldier and coming to the United States as an immigrant after the end of World War Two as he likes to put it. Speaking five languages all with an accent from having journeyed through so many countries to get here. And my dad did something very unusual in the 1950s after he. Completed a degree at MIT got his Ph.D. at Harvard. He decided to start a company. And at that era there was no venture capital industry. There was no real way to fund your company. But as an immigrant entrepreneur he didn't really care about any of that. He just was focused on building an interesting and exciting technology company and the route 128

Boston area which eventually became a defense electronics firm focused on lunar landing and the Patriot missile with Raytheon and things of that nature. And that's the upbringing that I had. I grew up with that kitchen table MBA that those of you who have grown up with entrepreneurs may have experienced yourself where you know every night at dinner we would be sitting around the table talking about my dad's company. And the thing that I was really struck by as I look back on it is that we didn't talk about technology even though he was a technologist. We talked about people. We talked about who was getting along with whom. Why the V.P. of engineering was such a prickly bastard why the V.P. of sales couldn't get along with the V.P. of marketing things that many of you may have experienced in your own business environments. And it was with that inspiration that I began to see in myself the desire and the dream of being a technology entrepreneur. And so I embarked on that career. I went to

college at Harvard with Joanne McCASKIE here in my. College buddy in the audience and focused on computer science do computer science. I went and worked at a management consulting firm the Boston Consulting Group to get some business experience. And then I went to business school focused on being an entrepreneur starting a company and embarking on my own journey. And along the way I bumped into a venture capitalist. And I never heard of venture capital before and my dad didn't raise venture capital in the 1950s and 60s there wasn't really a venture capital community. But in the nineteen 80s and 90s a very small cottage industry in Boston and Silicon Valley emerged and began funding these little technology startups and I met group was a business school and they offered me the opportunity to join them as a partner track associate after business school. I asked my friends you know what's venture capital What does that mean. And what's this all about. And one of my friends said that's probably a lifetime value. Hundred

million dollar opportunity. And I ended up turning that opportunity down in what probably was one of the most irrational financial decisions I've ever made. But a great personal decision because I knew I wanted to be an entrepreneur. And so I said to them introduce me to your companies. And they introduced me to a company and I ended up joining this little company called open market and took a $65000 a year product management job as a you know entry level business person in this third person company that had just gotten venture funding from this firm. And that led to a sequence of really interesting events for me because along my entrepreneurial journey the internet happened. Which was great and little open market was a company focused on turning the Internet into a business environment. And we hired 200 people in our first year went public in 1996 with a more than billion dollar market capitalisation. Even though we only had 1.8 million dollars of revenue that we had done the previous year

grew as the fastest growing software company over the course of 96 97 98 and built 100 million dollar software business which became an interesting business. And some of you may know up and market back in the mid 90s it was an e-commerce leader and I had the opportunity to go from junior product manager to a member of the executive team running you know a third of the company and getting just a fantastic sort of real life MBA entrepreneurial MBA. After doing that over the course of five years I got the good fortune of bumping into another venture capitalist who introduced who called me up cold invited me out for breakfast and said there was a great entrepreneur I want you to meet. He's got a big idea. Again the idea. His name is Michael BRAWNER and he started this company. You may have known here in the community called digitus at the time it was called BRAWNER Schlossberg. He sold that and he's now focused on helping families save money for college. And that struck me as a tremendous

idea and a great business opportunity around that. And so I left open market and joined Michael as the founding president of you promise a company that became your promise and you promise had this vision of a double bottom line company doing well by doing good. We would help families save money for college by redirecting billions of dollars of loyalty points minute miles and rebates into these tax free college savings plans. We had an incredible ride. We raised and these numbers sound even more ridiculous today. They were ridiculous at the time we raised $34 billion in our series A financing when it was me and Michael a handful of other folks operating out of his house with 20 PowerPoint slides. We then raised 55 million. It there's a nice house. In fact funny story about the house there are in a leafy suburb in Brookline there are speed bumps with my name on them. Because our employees which Neumar we ended up hiring 30 people in the first four months

started coming in with their cars and vans and trucks and everything else. And the private neighborhood in Brookline went nuts. In fact a town inspector came to visit us and I sent our General Counsel out because I figured he wouldn't lie. He'd figure out a way to navigate this and he bumps into the town inspector in the town inspector said you know you're not allowed to embark on a commercial business here you know where are you guys doing. And our general counsel says yes we're aware of that. We're on a project for the owner. And the town town manager. Inspector said You guys better get out of here because you're in a lot of complaints from the neighborhood. So we very quickly got office space and became a proper company. Anyway a company raised almost in a series B we raised fifty five million dollars. This was in October of 2000. So the bubble would crash in March of 2000 it hit a bit of a plateau. And we were able to raise $55 million. We hadn't recorded a nickel of revenue yet.

But we had a big idea we had a great management team and we embarked on your promise in a very exciting time and you promised became a very successful company and people may even be members. There are about 12 million households in the service and about $20 billion of assets under management in these college savings plans. That Sallie Mae eventually acquired the company and now owns the company today and you still see it operating as an independent service as part of salomé. So I gone through these two very interesting entrepreneurial adventures both times. The catalyst was a venture capitalist that called me. And so the third time I got a call from a venture capitalist while I was at you promise I was really focused on that conversation and it was from a couple of friends of mine who had been investors in those two companies who were starting a new venture capital firm and invited me to come start the firm with them. And that became flybridge capital and that's the firm that we started about eight years ago and that I work at today is one of the partners. And as Kiki mentioned we're an early stage investor

focused in the technology area. We have about 50 portfolio companies probably 35 in Massachusetts that employ about 1000 people and we make small investments from a million dollars up to $10 million in these companies. Along that journey from entrepreneur to venture capitalists I started really studying the venture capital industry. And as an outsider I hadn't really understood it. I was a customer you know VC would call me. I would jump. They would say go take this meeting I would take the meeting I figured there was money at the end of that meeting. And I didn't really understand the business until I entered into the business as an entrepreneurial VC trying to figure out how it worked and what I learned was was I thought pretty interesting because as an entrepreneur the VC business was very opaque and mysterious to me. It turns out there are very few practitioners although it has a massive impact. Kiki gave some of the numbers you know just think about this 20

percent of all jobs in the U.S. are in venture backed companies 12 percent of the GDP. And yet the venture capital industry every year funds only about 1000 new companies and puts out about one tenth of 1 percent of capital relative to the entire stock market. So incredibly small business and it's practiced only by about 1000 full time senior professionals. So incredibly small business with massive leverage. Those thousand professionals just happen to be spread out in Boston Silicon Valley in New York. So many of you may interact with them many of you may know companies that are venture backed companies but for many people it's an incredibly opaque business. And so about five or six years ago I started a blog about the venture capital industry. I walked into my partners meeting one Monday and I said Hey guys I'm going to start blogging about what we do. And I said no you're not. It's a secret. Nobody is supposed to know what venture capitalists do. That's part of the mystique.

And I said no no it's going to be great. I'll provide more transparency. Entrepreneurs will get a better understanding of the business and make them better entrepreneurs. And so I started this blog called seeing both sides the perspective of a former entrepreneur turned VC and it became very popular. BusinessWeek Reuters A number of places syndicated it hub and suddenly many venture capitalists started blogging about a year ago two years ago. Now a friend of mine said you should turn that into a book because the information that you're providing and that other VCs are providing really is not captured anywhere in one place. And I said that's ridiculous. There must be a ton of books written about this industry it's a massive really important industry being replicated all over the world and China and India and in Europe there must be a very well-studied industry. And I looked it up and there are very few books on venture capital in fact they fall into two buckets. There are academic books written by Harvard

Business School and University of Chicago professors. If in 10 pages you would fall asleep. I did and I'm in the business or there are bubble books written by Fortune magazine authors about how easy it is to become a billionaire in Silicon Valley. And there was nothing that was really practical advice for the entrepreneur and so that's what I embarked on trying to do. I went out and interviewed a dozen great entrepreneurs. I went and talked to a dozen great VCs tried to pull those lessons together with my own experience both as an entrepreneur and as a VC and try to synthesize that into 240 pages of advice on how to navigate the startup business. I interviewed some terrific people and I try to do it in a diverse range of areas so you'll see interviews with Jack Dorsey the founder of Twitter. It's an amazing story about Jack. How many of you use Twitter. Out of curiosity. OK so a good number of you. So you know what it is Twitter is about status and information sharing and real time amongst your network.

What's amazing is that Jack had the idea when he was in high school 15 years before actually starting the company. He loved bicycle couriers. And he loved the notion of where the couriers were and zipping around the city. He grew up in St. Louis. Not particularly urban not a lot of couriers in St. Louis but somehow he had this vision of keeping track of his friends and keeping track of people around a city move to New York worked for a software company that did taxi dispatch software and then sort of continued on with this vision that turned into Twitter a project he worked on on the side before it spun out as a real company. Your tweeting right now. And is tweeting the thing that impressed me when I interviewed Jack and other great entrepreneurs like Al Goodman the CEO of constant contact an e-mail marketing company and you all may get spam e-mail from her. REID HOFFMAN the CEO and founder of LinkedIn and I talk to these entrepreneurs and when you

talk to them they don't focus on the money. It is really interesting. In fact many of them are completely clueless about the money. Reid lived in a two bedroom apartment. Throughout his founding of Pay-Pal another firm. He started made hundreds of millions of dollars started Linked-In. They care about. They are passionate about changing the world about making an impact about what it is that they're doing. And if you think about the decision I made as an entrepreneur turning down this very lucrative VC job for a $65000 a year junior product management job. It wasn't about the money it was about my passion about being an entrepreneur. If you do the expected value probability weighted analysis of what it is actually worth to be an entrepreneur no one would ever start a company. Right. It just doesn't make logical sense. But what's amazing about great entrepreneurs is they're not logical. They're just focused on building a great service or a great product or changing the world.

So that was one really powerful lesson. The second really powerful lesson that I gleaned in my interviews with the entrepreneurs and the VCs was around alignment. It is amazing to me how many horror stories and soap operas you hear about when VCs and entrepreneurs come together and you have this soap opera like drama and tension fighting over power fighting over economics fighting over you know who's running the board meeting. I mean crazy things that happen that lead to these soap operas. The best entrepreneurs and the best VCs figure out a way to achieve alignment. They figure out a way even though there are structural impediments they overcome these and have very direct open relationships with trust and respect is the foundation and figure out a way to really partner to build great companies. And almost every one of these great companies that you all know about in our community and around the world that were built by these entrepreneurs with the help of VCs

you will find when you talk to those people they were really aligned they were aligned around the vision around the end goal of what they were trying to do. And around the structural relationship between them. When you don't have alignment in these dramatic tense situations you know startups are hard right. This is really hard to create these companies from scratch. And when you don't have alignment it can be a disaster. And that's a lesson by the way that I think is quite universal in the nonprofit community in the political sphere as well. It is a one of the most important tenants I think of business and it's something I really saw as I embarked on on the book and the activities. The final big takeaway that I'll convey to you and then I'll stop and take questions is that the notion of the exit is something that is always in the mind of the entrepreneur and the VC. But too often not discussed openly and directly. And this also puts to the alignment point.

Entrepreneurs and VCs if they are truly aligned. They know at the beginning what they're trying to accomplish at the end is this a company we're going to run for 20 years. Is this a lifestyle business. Do I want to flip this business in a year or two. You know what are we really trying to achieve and what are the underlying motivations. My first time entrepreneur that wants to have my first win and my be an entrepreneur that's made some money. I have $5 million in the bank and I'm actually going for the Grand Slam so I'm going to take all the risk and really go for it. Navigating that exit process is the difference between success and failure in the entrepreneurial world. With the IPO market becoming more difficult to achieve. This is becoming an even more important aspect of what entrepreneurs and VCs do. And I would tell you and I have a chapter on the exit and give a couple of case studies like Gail Goodman and the IPO process she went through like an entrepreneur named Eric Paley who team with an MIT professor to create a very exciting company called Brontes that he sold very successfully to 3M. You know I

talk about that navigating that exact process right at the beginning and just the importance of figuring it out as a team. What you're trying to achieve in the final chapter I profile what's going on around the world I interview the guy who runs the largest venture capital firm in China. The head of the largest venture capital firm in Vietnam which is a pretty small firm. And a woman who is a venture capitalist in Europe they give a global perspective because what's happening here in our little innovation economy is being replicated all around the world. Every country every city wants what Boston and Massachusetts have. They want this cauldron of technology innovation universities great university system entrepreneurs venture capitalists and a culture that is supportive of innovation every almost every city in America and certainly every country around the world has been coming here to

study this model. Coming to MIT's Sloan coming to Harvard Business School. This book is now getting translated in Chinese. I've learned and it's really something for us to reflect on in terms of where we're heading as a country and where we're heading as a community because we need to focus on that innovation agenda and keep pushing the ball forward before the competing communities take away that edge that we have both as Massachusetts as a community and as the U.S. as a whole. So that's the quick tour of how I got into this and what I tried to embark on in writing this book and I'd love to take questions and have dialogue. And then as Greg said we've got a reception here. I've got a bunch of the books that I brought over. I've been donating the money from my proceeds. By the way the publishing business is a terrible business. If you haven't figured that out. Greg sorry. You don't make any money which is OK because that's not what drives me as you learn from my earlier decisions but

but any money that I do make any meager fraction of money that I make I've been donating to a nonprofit called Endeavor which is a global nonprofit focused on entrepreneurship in developing countries and supporting micro investments in developing countries. So I would encourage you to you know take a book consider making a $20 donation to endeavor which I'll aggregate and send to them on a periodic basis over the course of the coming year. So that's it. And with that open it up for questions and comments and thoughts. It's. Not where does mastering end game. Yeah the question is the title mastering the VC game. How did I come up with it and play on words first I should tell you that when I got a publisher My publisher was Penguin and their business imprint portfolio. I said well what are you going to do for me. My understanding is that publishers don't market books you just don't do that

anymore. And he said yeah you're right you'll do all the marketing will do nothing. So where are you going to do for your you know large cut. And they said we're going to come up with the title. And we'll design the cover. So through many iterations we collectively but they reading came up with the title. So the notion was. You know the book is for entrepreneurs and to help entrepreneurs mass develop a sense of mastery. And I love games. I love sports and I thought the notion of this dance between the venture capitalist and the entrepreneur which was the game I wanted to help entrepreneurs master it just felt like a coherent and on point title. Oh sorry.

I think my questions about Boston being a center of venture capital activity with all the other attributes that you mentioned you know intellectual property and. So you have the Silicon Valley Yeah. Austin you have. Maybe the triangle in North Carolina. Where else do you see this happening and how is Boston doing. Yeah. Relative so I'll give you a little data on that. So in Silicon Valley Boston and New York. You have 70 percent of all the venture capital money managers in the country. In those three cities it is extraordinarily concentrated industry. Is number two. New York is number three. It's a distant number two. It's about one third the size of Silicon Valley in terms of capital managed and capital deployed. But on a per capita basis it's actually larger. There's a higher concentration of money per capita here than any place in the world. It's actually a funny thought because think of it if you're an

entrepreneur you don't care about the total amount of money you just care about the money for you. So the amount of money per entrepreneur is at a higher level of concentration than in Massachusetts than in any other place in the world. The Boston community has a pretty robust ecosystem and it's very diverse. We did a presentation that I posted on my blog about what makes the Boston startup scene special and to talk I gave at Harvard Business School last year to students interested in I teach a little bit part time at HBO s and there was a group of students interested in entrepreneurship in Boston. And one of the themes I hit on was the diversity of the area. Whether it's the wireless industry where we've had four companies sell for over $100 million wireless companies in the last few years which is amazing robotics where we have this incredible cluster of interesting robotics companies Internet marketing services new media. Life Sciences clean and tech There's an incredible diversity of interesting companies here in Boston is why we have found

Boston to be a very fruitful investment area. You know might X is a big slice of that but they're in the life sciences sector and the clean tech sector. Really interesting places. And one might argue that this community has risen in importance in clean tech and life sciences in part thanks to great policy. I think Governor Patrick has done a terrific job in focusing on those areas with a couple of bills that these past couple of years ago. In part the universities have shifted. You know Harvard created the stem cell Institute the gene mapping project out of the Whitehead Institute MIT Harvard Joint Institute. Do you know that today it cost $10000 to map and sequence your genes. It was a billion dollars 10 years ago and in two or three years it'll cost less than $1000 and all of you will get your genes mapped or sequenced in five years. I would predict because you're all going to want to know all the interesting analytics and diagnostics behind that. All of that work and research has been done here. In fact our kids kids when the baby is born will come

with a 15 page analytical report. On your genes and your heritage and that and the backdrop. I think so. More data right. I'm a data guy I think more data is good. So anyway this is an incredibly rich community and that in that regard and it's all on a very tight concentration here and in Boston and Cambridge. Yeah. Affected the VC community here in particular and we really into coming out. Yeah. So the question was Has the recession affected the VC and started community it's been good and bad. So on the bad side the industry is shrinking. People think it'll probably shrink about a third. So about 30 billion dollars went out in 2007 to venture backed companies. It was about $18 billion last year. People think it will stabilize around maybe 14 to 16 billion. So maybe down you know even further and there are fewer venture capitalists obviously

when you have less money. So there are people less people in the industry. So that's been bad. On the good news side. There have been two really interesting phenomenons I've observed in the last couple of years. One is that the opportunity cost to be an entrepreneur has plummeted. So the cushy job is no longer so cushy in the big company. And the entrepreneurial culture particularly in this community is incredibly strong. I did a presentation at the ACG conference which also posted on my blog called The Golden Age of technology and innovation where I mapped some of these entrepreneurial leading indicators. And if you look at MIT business plan contest submissions number of entrepreneurship programs around the country number of startups just being created. Number of angel investments. All of them have grown tremendously in the last couple of years. So the intent and interest in being an entrepreneur has really been very strong in this economy. The second interesting phenomenon is that whereas some

VC firms have shrunk. There are a lot of angel investors and micro VCs that have emerged. You know people who made money who now want to. You know they made money in the 80s and 90s and want to now recycle and invest $50000 $250000 in startups that has exploded. The University of New Hampshire the venture has a venture capital and entrepreneurship center. They track every year angel investments both dollars and people. And 2009 saw a record year which is amazing given 2000 2007 you'd have thought really strong years. So it's been a very strong phenomenon in the angel community. So you know I think it's mixed. I as I said in this presentation I gave I think the pace of innovation and technology opportunities have never been greater. Whether we can marshal the capital to go after them will be to be played for. Your side because so much for your presentation. Excellent job. My name is Ian Williams. I'm a student

at Suffolk University and for the last two years I've had a chance to visit. Kampala Uganda East Africa. I'm working with former child soldiers and traffic children. And one of the things I've found. With the people there and you go into a very productive very hardworking people. Everyone talks about capital. You know we don't want handouts we just need some capital. We look at. The holding of our micro-financing. In a very difficult difficult time difficult economy worldwide. How does how does venture capitalism work. Work. In the most difficult of terrain like in Africa where is developing where you know the cell phone industry is taken off but it's still hard for people just to grab. How does this work. Yeah you should check out endeavour. You know Endeavour dot org. It was started by a Harvard classmate of mine Linda Rosenberg. Who was inspired in large part by the venture capital paradigm.

And doing these micro investments and entrepreneurs its capital but it's also information I think the thing that people have been following what's been happening in the mobile and wireless industry. The thing that's so powerful about wireless access coming into these depressed areas is that the power of information and communication is enabling extraordinary entrepreneurial opportunities. You know suddenly the fishermen can get messages with respect to the conditions across the network to determine whether to invest in spending the day fishing and taking the trip to the to the ocean or to the lake and buying the equipment and everything else. I mean the at the micro micro level the sharing of information through the wireless networks has been extraordinary. And so I think that's where a lot of the power of this of the power of entrepreneurship is going to come. Innovation. Information sharing and some of these fundamental things like broadband infrastructure wireless 3G 4G infrastructure getting in place in these in

these developing economies many of them are leapfrogging old you know wireline infrastructure. And it is it's a loaded question. Yes. Everything from me is. Jeff. To what extent are these entrepreneurs the ones that many of us have a sort of a mythic vision of who they actually are. To what extent are they. Trying to meet social needs much any more than any other generation of entrepreneurs in the sense that I guess an entrepreneur is always trying to find a niche where something hasn't been done yet. But the ones that get a lot of high profile other than sort of rock bandits and stuff like that. Often seem to be very relevant in some sort of broader context and so are the railroads. You know so it's not like that's never happened before. But is that a is is that a phenomenon and there is just a perception.

How would you describe the relationship between social need and entrepreneurial ism. You know I think that we are living in a generation. Of students and younger people who are more plugged into social action and social issues. You know when you hear Mark Zuckerberg of Facebook talk about the founding vision behind Facebook it's a lot about empowerment and connecting people. It's a lot about going into the Ugandans of the world and helping people connect and disparate geographies. When you hear about the founders of Foursquare which is this really interesting mobile social network out of New York City you know those two founders are super focused on the social dimensions of meeting people coming together congregating creating civic opportunities. People may know meet up. With them or you know well you know Meetup is a political action in many ways platforms but it's a for profit entrepreneurial venture. Wikipedia you know reach out here Jimmy Wales the founder of Wikipedia talk about what he's trying to do

it's about information dispersement and making information free and available and very authentic relevant fashion. So I think there is there is a generation of entrepreneurs that are very socially aware and socially conscious. Again the money isn't the big focus for them it's about the impact they're having. And the big idea that they're trying to get out there in the community. I'll take one more. And then and then we can wrap up into smaller groups. Yeah. Hi my name is Toby Harrison and I'm looking to establish my own company but I'm thinking of a route to. Start my own company or have some experience in the VC industry first then start. What do you suggest. You know I'm a big fan of going out and. Getting entrepreneurial experience on someone else's nickel. So

my suggestion would be go find a 50 person 100 person 200 person company. Go find some mentors who can help you learn the ups and downs of the business and learn on someone else's nickel before you start your company. When we funded entrepreneurs the entrepreneurs that I have the pattern is that we fund people who have really deep insight into the problem that they're trying to solve. And I think the way you get that insight some of you may have it just at age 22 but the way most people get that insight is through experience in that industry and in that domain. Those people tend to be the most compelling entrepreneurs are the ones who have been living in a space have developed deep insight and come out of that space and say I've looked at a different way of approaching this problem and I understand the problem at a 360 degree level unlike anyone else. Remember this is a globally competitive world. And the question we have to ask ourselves like other VCs do is Why has this person have a unique perspective and a unique ability to execute on this

relative to three people in Bangalore for three people in Beijing. You know it's not just about I have a good idea I like to implement this idea. You've really got to have a comparative advantage. So. Coby's right. That's it. Oh we'll hang around. The blog