As my friends and colleagues know, there are few times I am truly speechless. One is when the SEC orders it to be so during a "quiet period". The other is when I remember why I got into this entrepreneur backing VC business in the first place in 1998, after starting and selling my own tech business. Both are in full force today and the last few months due to the Medidata IPO which occurred today, so I will be brief.
Medidata is a New York based startup pharma software company that I led the first institutional round on for my fund, Silicon Alley Venture Partners (now Greenhill SAVP) and Stonehenge Capital in 2002.
In this post, I want comment on what this IPO means to me, and our local tech community, and to publicly thanks and congratulate the Medidata founders, Tarek Sherif, Glen de Vries, and Ed Ikeguchi and the entire 700+ member Medidata team. In addition, I want to thank Milestone Venture Partners, Insight Capital and Stonehenge Capital, our co-investors, for the work and effort they have put in as well.
At an event tonight that Sonnensheim, PWC and Silicon Valley Bank had at Remi's in midtown, I got several high fives, and virtually all day I received a stream of emails and twitters from my entrepreneurial friends all over the city and the country. They all had great things to say, but a good number of people expressed that Medidata has shown that: 1/ the technology IPO is not dead yet, thank god, and 2/ New York based technology companies can compete with the best technology companies in the world.
What scares Silicon Valley more than anything, is that, with the commodization of core information technology, under-served regions of the country can compete and be in forefront of the next wave of technology innovation, technology enabled internet services. My charts, graphs, tweets, and blogs demonstrating this thesis can never really be as convincing without a fistful of public offerings like MDSO, showing public proof that the future is coming.
We are not quite there yet.
But, uultimately, I believe the technology enabled services boom is going to be a long and great boom, longer than the PC boom, and will be uultimately heard not just in New York, but around the country and the world. I believe the New York area has a unique leg up given it's proximity to entrepreneurial talent, capital and customers in the finance services, telecom, advertising and publishing sectors; and that each part of the country has it's own local industry domain expertise and brand of entrepreneurial ism. A public offering is the exclamation point that quiets the naysayers, and puts credence to this sector and under-served region thesis. This argument is far from over, but this is the first crack in the tired paradigm that tech entrepreneurs can't thrive outside Silicon Valley. Fortunately, many people still believe that, so, as contrarians are the ones who often make money over time, there is a lot more money to be made for savvy entrepreneurs and their backers who invest outside of Silicon Valley.