Boston edges out Cambridge for new technology firms

In a somewhat surprising development, Boston actually had more venture capital deals than Cambridge in 2013.  Ninety-seven deals were signed in Boston, vs. 78 in Cambridge.  Cambridge does still hold a commanding lead in the dollar amount, however, with total funding of $820 million (down $105m from 2012), vs. $593 for Boston (up $85m from 2012).  The entire Boston metro area totaled over $3 billion in funding (approximately the same as in 2012).

As reported in the Boston Globe, Boston seems to be attracting more of the very small and very early stage firms, while Kendall Square in Cambridge and Waltham in the suburbs have matured somewhat, with far more mid-sized and large established companies.  In contrast, really small startups and associated venture capital firms alike are increasingly finding homes in Boston’s downtown Innovation, Financial and Leather Districts.  Anecdotally, it’s a younger crowd being attracted to downtown.

“There are more subway lines, and it’s a little hipper in the downtown in many ways because there’s better food”

Besides the tasty food, another big factor is the proximity affect.  One VC firm, NextView Ventures, is an investor in 9 companies that are all within walking distance from its offices in the Leather district.  Of course Cambridge and Boston are so close that you can almost walk from one to the other during your lunch hour, so parsing out Cambridge vs. Boston’s lead in VC funding is a bit of hair-splitting.  What I can say is that on a clear day, I can see a surprising number of construction cranes in both cities.

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