Formation and Success
Formerly known as the Massachusetts Technology Development Corporation (MTDC), MassVentures was formed in 1978 as a quasi-public corporation by the Commonwealth of Massachusetts to address the capital gap for start-up companies and to encourage the growth of early-stage technology firms. MassVentures’ enabling and governing legislation is Chapter 40G of Massachusetts General Laws as amended in 1993 and 2002.
Companies backed by MassVentures have employed over 7,500 individuals in the Commonwealth with an annual estimated payroll of $612 million. Over its 30+ year history, the MassVentures Traditional Fund, an evergreen fund, has enjoyed an excellent rate of return.
- MassVentures-backed companies have raised more than $900 million in additional capital
- MassVentures-backed companies currently employ over 2,500 people in the Commonwealth
- MassVentures-backed companies have an annual $216 million payroll
- Sixteen companies in MassVentures’ portfolio have gone public
- Over its 32-year history, MassVentures’ Traditional Fund – an evergreen fund – has generated a positive gross return on capital
Initial funding for MassVentures came from a $2 million grant awarded by the Economic Development Administration (“EDA”), a division of the U.S. Department of Commerce, in 1979. These funds were used to establish a revolving loan fund for Massachusetts companies with operations involving a significant amount of technology. These companies also were required to be located in an “EDA” eligible area. In 1981, the EDA awarded MassVentures an additional $1 million for a second revolving loan fund to assist in the creation and development of small, innovative, high-technology companies in Massachusetts, and the Commonwealth of Massachusetts provided $1 million in matching funds. After that, each year, from 1982 to 1988, the Commonwealth appropriated additional funds totaling $4.2 million, which allowed MassVentures to create its first venture capital fund, called the Traditional Fund. This Fund is operated as an “evergreen fund” which uses gains realized from past investments as the primary source of funds for its operations and for investments. The legislature appropriated $5 million to MassVentures as part of the 2004 Economic Stimulus Bill and $2.5 million as part of the 2006 Economic Stimulus Bill.
In 2012, MassDevelopment through its Emerging Technology Fund engaged MassVentures to invest $5 million within its core areas of focus to continue fulfilling the MassVentures’ mission and charter.
History of MassVentures’ Origins