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Even as business and government officials consider ways to keep entrepreneurs in the Bay State, three startups launched this year have found good reasons to put aside their Boston ties and move elsewhere.
Those defections have come despite the fact that more billion-dollar companies are now growing in Massachusetts than in any other state, according to a recent report by venture capital firm Highland Capital Partners.
Nonetheless, behavioral analytics software developer Triangulate Inc. believes it has its best shot for big growth in California. Likewise, mobile payments platform Payfone Inc. and regulatory-compliance software developer The Better Advertising Project Inc. set up shop in New York.
Sunil Nagaraj and all three of his co-founders at Triangulate came out of New England schools, but when it came to launching their company, Triangulate moved to Silicon Valley, a stone’s throw from potential hires, investors and acquirers.
“Boston is great for singles or doubles, but if you want to shoot for the home run or strike out, it’s better out West,” he said.
However, according to the study by Lexington-based Highland, in the past five years, Massachusetts’ venture economy has created more billion-dollar companies than any other state.
The Highland study, culled from four data sources, listed venture-backed companies that went public on U.S. markets in the past five years and had $1 billion or more in market capitalization at the end of the third quarter of 2009. Massachusetts had five; California had four.
Like many ad-industry startups, Better Advertising chose New York, where it is incubating at private equity firm Warburg Pincus. It is developing compliance software for advertisers.
CEO Scott Meyer founded the company with acting CTO Simeon Simeonov, a former venture partner at Waltham-based Polaris Venture Partners. New York has the advertising business, but Boston has technology talent, Simeonov said.
At Payfone, founder Rodger Desai is discovering the same thing. Desai had already founded two Massachusetts startups — Rave Wireless Inc. and Vettro Corp. — when he planted Payfone’s headquarters in New York. He’s more likely to look to Massachusetts for growth, he said.
Payfone is developing a one-click mobile payment system, integrated with the back-end of global roaming clearinghouses such as Syniverse Holdings Inc. (NYSE: SVR). The aim is to enable digital-goods and mobile-apps merchants to convert cash prices into prepaid minutes, or add charges to a monthly cell phone bill.
Desai said the company, seed-funded by New York-based RRE Ventures, has signed deals with mobile e-commerce platforms comprising 500,000 merchants.
“The engineering teams that we’ll build out won’t be in New York in the next three years,” he said. “A lot of starving college students come to (New York) but they don’t come here for software and IT. They come here for Broadway.”
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