Despite the challenging climate for tech startups, Boston’s innovation scene continues to expand in ways new and old. While funding for startups is down — the first quarter could be 60 percent or more below last year — some seeds of future growth have emerged in the past few days.
Last Saturday at the Boston Park Plaza hotel, more than 300 people, mostly students, gathered for the first-ever conference put together by the Harvard Undergraduate Venture Capital Group.
Founded in 2018 by a handful of Harvard students interested in startups, the group attracted some big names for its conference, including Toast cofounder Steve Fredette, Unusual Ventures partner Sarah Leary, IntelyCare chief executive David Coppins, and Salsify cofounder Rob Gonzalez.
The pandemic-era growth of remote working, and remote schooling, has encouraged many undergrads to start their own companies while staying in school. And numerous groups like the Harvard student VC group have sprung up at colleges and universities to support them.
Edbert Wu, the Harvard group’s co-president, and Michael Oved, the group’s director of student initiatives, kicked off the conference on Saturday morning nattily dressed in suits and ties.
Oved, a sophomore who last year dreamed up the idea for a summit open to all area students and founders, said the goal of the conference was to help undergrads meet and network with investors and mentors.
“There was no way for undergrads to meet entrepreneurs other than a cold e-mail,” he said. “Today, they can be able to meet these types of people and learn from them.”
Fredette hung around for more than an hour after his panel, speaking to dozens of students one-on-one and regaling them with tales of his restaurant-tech company’s early days.
“You can see he’s just a normal guy and you think you could do that too,” Mani Chadaga, a Harvard sophomore, said after chatting with the Toast exec.
Boston tech investors are also expanding. On Monday, venture firm OpenView announced its seventh and largest fund yet, raising $570 million. The firm, founded in 2006, focuses on business software startups and has about 70 people working out of its Seaport headquarters.
The new fund comes after a tumultuous year for startups and VC firms, with the economy slowing and tech prices crashing due to higher interest rates. But tough times provide opportunities, John McCullough, chief operating partner at OpenView, said. “It was very expensive to invest over the last couple of years,” he said. “But at the end of the day, I think it’s a better environment with lower valuations.”
Promising areas for the new fund include cybersecurity startups and those focused on automation software, he said. And the hype around AI applications that can create original text, photos, and art is real, McCullough added.
“Generative AI is more than a trend, it’s a long-term change in technology that we’ve been looking at and investing around for years now,” he said.
The failure of Silicon Valley Bank was another hit to the startup ecosystem, as the bank’s Boston activities included lending money and providing a host of other services to young companies. But McCullough is already seeing signs that the hole will be filled by others. “We’ve seen some positive indications and heard from some of the bigger banks that they’re thinking about developing some of these things, but it takes time,” he said.
OpenView is headquartered in Boston and it invests globally. But the remote work trend that arose during the pandemic could loosen the grip of tech centers like Boston and San Francisco as major hubs where startups form going forward, McCullough said. Talented workers are increasingly dispersed across the country, he said.
“For new startups, that headquarters doesn’t mean as much as it used to,” he said. “There’s all kinds of different models of remote work, hybrid work, and back to the office. The location matters a little bit less.”
Aaron Pressman can be reached at firstname.lastname@example.org. Follow him on Twitter @ampressman.