TiE-Boston monthly meeting on ’‘Outlook 2004: Venture Capitalists Share Their Perspectives’ was held on Tuesday, February 24th at the Burlington Marriot. The panel consisted of Ed Anderson , Managing General Partner, North Bridge Venture Partners, Bob Higgins, Managing General Partner, Highland Capital Partners, Mike Krupka , Managing Director, Bain Capital Ventures, Chris Greendale General Partner, Kodiak Venture Partners and Bill Schnoor, Partner, Testa Hurwitz & Thibeault..

The panelists who are senior venture investors in Boston area provided their views on where the telecommunications, healthcare, software and IT services market will be heading in 2004 and beyond. They listed hot areas for venture funding and discussed the issues and barriers for entrepreneurship in each of the fields.

In the software arena, web services are just beginning, collaborative software are blooming and opportunities exist for knowledge management software. The need for better solutions in security and anti-spam areas is an excellent opportunity for entrepreneurs. Venture capitalists prefer deep domain application software but are wary of software that can be easily added as a feature to established software product or operating system. “Open source is here to stay. Linux, mysql and JBoss are good examples,” said Mike Krupka. Venture Capitalists prefer to fund companies that have 50% service model since revenues from services are more predictable than those from selling software.

Biotech and health care became much favored sectors for venture capitalist after the dot-com bubble burst. Growing drive to eradicate diseases such as cancer and diabetes, interest to develop vaccines for infectious diseases and developing medical devices for diagnosis provide opportunity for entrepreneurship. Entrepreneurs in healthcare and biotech area should be aware issues with Medicare and FDA

"There is lot that needs to happen in communication and wireless arena," said Ed Anderson. Consolidation seems to be rampant in wireless industry for year 2004 and 2005 thus generating need for consolidation of operators, systems and services, particularly billing systems and CRM.

The panelists had unanimous opinion that the time is good for entrepreneurs since the valuations are not low. The panelists said venture capitalists are not concerned of outsourcing, but preferred companies with local management teams. Great people, quality management, clarity of purpose and marketing are very important in building great companies factors that influence venture funding.

Ketan Patel encouraged people to register early for TiECON to be held June 3-5th this year. TiECON, TiE Boston’s annual event was sold out last year and was a great networking opportunity for entrepreneurs. Further information about TiE and their upcoming events is available online at http://www.tie-boston.org.

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