Inside OpenView's corporate relocation program
Scott Maxwell grew up in Silicon Valley, but these days he is practically operating a shadow economic development agency in Massachusetts. As founder of OpenView Venture Partners, a Boston-based venture capital firm (and before that as the head of the Boston office of Insight Venture Partners), he has persuaded more than a half-dozen companies from around the world set up shop here.
OpenView targets software and Internet companies that have already created a product or service, and begun generating revenue. “We look for companies that have around $5 million in revenue when we invest,” Maxwell says, “so it’s really expansion investing, giving them the resources they need for growth.” OpenView will invest in start-ups anywhere in the world, Maxwell adds, “but the company needs to have a North American strategy.” Often, that entails setting up a new headquarters in the U.S. and hiring a CEO here. OpenView’s current fund totals $233 million, Maxwell says, and typically the firm puts about $7 million or $8 million into a company as its initial investment.
While a partner at Insight (a Manhattan-based firm), Maxwell brought three companies — Astaro, Imceda Software, and Acronis — to Burlington from Germany, Australia and Russia, respectively. Intronis, a cloud-based back-up service that started life in New Jersey, is now operating out of OpenView’s Fort Point Channel office, and Zmags, an online merchandising company founded in Denmark, is now headquartered in the same neighborhood. Two other companies, Exinda and Open-e, have established headquarters in Boston after raising money from OpenView.
Most of the companies are still relatively small; all told, they account for perhaps 250 jobs in the state, according to OpenView’s figures.
“Boston is just the best place to set these companies up,” Maxwell says. Often, they start by using space in OpenView’s offices.
“It’s really difficult to grow a company in Silicon Valley,” he continues. “There’s too much competition for hiring, the costs are high, and people in Massachusetts work a lot harder. For business-to-business companies, the labor pool is incredible here, and there are plenty of salespeople. And I say all that as a California native.”