Fighting Noncompetes, Boosting Diversity on New NEVCA Head’s Agenda
The incoming leader of Massachusetts’s venture capital trade group has big shoes to fill, and she must quickly find her footing at a time when the local investor and tech communities stand at a crossroads.
This week, Jody Rose took over as executive director of the New England Venture Capital Association (NEVCA). The New York native brings to the table more than 15 years of sales and marketing experience with startups and more established companies in mobile, e-commerce, digital media, and TV.
She joins the NEVCA as Boston-area VCs grapple with important challenges, from adapting to new types of players and investing methods (think accelerators and online funding portals) to figuring out how to build deeper networks that help them stand out from the crowd of funding options that startups have to choose from.
It’s also a critical moment for Boston startups and mid-size tech companies, who will try to ascend the anchor tech company throne vacated by EMC, now owned by Texas-based Dell. The $67 billion acquisition might result in layoffs and buyouts, as these deals usually do, but the flipside is that could mean an influx of talent for smaller tech companies in the area.
Bottom line, there are challenges and opportunities ahead for Rose and her organization, which aims to support both investors and entrepreneurs in tech and life sciences, with the goal of making it easier to start and build companies in Massachusetts.
The NEVCA found a firm voice under Rose’s predecessor, C.A. Webb, who left earlier this year to start a venture capital firm. During her three-year tenure, Webb grew the NEVCA’s annual budget from $160,000 to $1 million and increased its membership by a third, to nearly 90 VC firms, the Boston Globe reported. The organization hosts events showcasing the local scene, including the annual NEVY awards, and it runs a program called Tech Generation that connects college students with internships at local tech startups.
The NEVCA grabbed the local spotlight last year as one of the main backers of a failed campaign to do away with Massachusetts noncompete laws. Supporters of noncompetes say such rules help companies keep competitors from poaching talented employees who might share information about businesses’ inner workings. Opponents believe these laws hamper innovation by keeping would-be entrepreneurs on the sidelines and restricting talent flow to startups.
Rose tells Xconomy that she’s still formulating her spending priorities for the NEVCA, but expect a renewed fight to kill Massachusetts noncompetes. She says those efforts could have new legs after Dell’s purchase of EMC, one of the state’s most prominent backers of noncompete clauses.
Besides lobbying, Rose says she plans to continue trying to woo new NEVCA members and to push diversity in local tech companies and VC firms.
Here are more highlights from our e-mail exchange, which was lightly edited for style:
Xconomy: The lack of diversity in the tech and venture capital industries is a big issue. How do you hope to help make the New England VC community more diverse?
Jody Rose: The community needs to see that Massachusetts is committed to diversity, both where gender and race are concerned, and I will continue to focus our efforts at the NEVCA to ensure we become bolder advocates.
The NEVCA is already an active and loud voice on these issues through our support of organizations like SheStarts, Girls Who Code, WE BOS, Innovation Women, and others. We were also a partner in circulating the Venture Census to establish an understanding of the progress that’s been made and the work to be done, and we are exploring relationships with organizations like Astia and Golden Seeds, which direct capital to women-led founders. Companies who have more diversity on their boards and at their senior levels have been proven to perform better.
X: A number of Boston VC firms have shifted their focus toward Silicon Valley in recent years, either by opening a satellite office there or relocating the fund’s operations there. Is that an area of concern for you, and is it a shift that you will try to reverse? If so, how?
JR: I think that question relates well to our larger, overall mission to make Massachusetts the best place in the world to start and grow new companies. At the end of the day, if we are successful in our mission, then Boston firms will look internally—and firms from the Valley will shift their focus toward us.
X: Some critics say that big local VCs are not investing in enough local startups, and the ones that they are investing in might not be the right ones to back. What’s your response to that?
JR: Well, that’s a two-part question, but again I think it relates to our overall mission. Individual VCs are going to invest in the people, companies, and ideas they believe in. We are not in the business of telling firms where to put their money; we are in the business of strengthening the local ecosystem. So, to borrow a charged term, we aspire to a trickledown effect: we work toward a local environment that produces/nurtures/fosters entrepreneurs that VCs look at and say, “This is a great company; this is where we need to put our money.”
X: Dell’s acquisition of EMC could have plenty of ripple effects in the Boston area. What do you think will be the impact of that deal?
JR: While we may see jobs being cut, the end result is often a renewal of talent in the local pool and an increase in entrepreneurial activity, as these former employees spend time building on their own visions and ideas. This is where the NEVCA and our mission comes in. A more productive exercise might be to look at the situation—the loss of the state’s “pillar tech company”—and ask: “What can we learn from this?” I would say we can look around and see that there are no heirs apparent, no Massachusetts company to fill the void. With that comes opportunity—who will be the next EMC? Interestingly enough, the very company we are talking about has, under the banner of strengthening itself, engaged in a major campaign to prevent competition around it.
X: Under your predecessor, the NEVCA lobbied for the relaxation of Massachusetts noncompete laws. Is that a fight that you’ll take up again?
JR: I don’t see any other option. As an organization that takes up the fight for fundamental fairness on the question of race and gender, I believe that we must also fight for fairness to employees on an issue that transcends race and gender. And similarly to the diversity issue, it’s both a question of fairness and of pragmatism. Diverse companies fare better, and economies with freedom of employment fare better. If we are trying to ensure an environment where entrepreneurs can thrive, we have to advocate for policies that support that mission.
X: With the acquisition of EMC—one of the state’s most prominent proponents of noncompetes—do you think there’s an opening to convince legislators on Beacon Hill to change the law?
JR: We believe so.
X: What’s your take on the recent controversies surrounding DraftKings?
JR: It’s great for Massachusetts and the Boston technology scene that a company has innovated its way into the center of the national discussion on this topic. DraftKings is another example of a company that has created a technology which has completely disrupted an industry. I love that the spotlight surrounding this disruption is focused on a homegrown company whose leaders are passionate and committed to Massachusetts.