Reactions to the Elevator Pitch

I just got off the phone with Chris Gabrieli, a wonkish VC who recently entered the Massachusetts gubernatorial race. Still trying to process my thoughts and notes a bit, but here’s an initial take:

We in Massachusetts love venture capitalists. We also love baseball players. Both make obscene amounts of money (home runs=home runs), but we don’t mind because their successes are viewed as beneficial to the public at large. Our current governor, for example, is believed to be a venture capitalist, even though he was a leveraged buyouts professional. So, to sum up: VCs and baseball players are good, specific job descriptions are bad.

Gabrieli, unlike Romney, is an actual venture capitalist. He joined Bessemer Venture Partners in 1986 -- two years after BVP had backed a healthcare information systems company Gabrieli founded called GMIS. He then went on to back such efforts as Alkermes and Millennium Pharmaceuticals, before transitioning into a venture partner role in January 2000. In 2004, Gabrieli helped form an SBIC called Ironwood Equity Partners, whose eclectic portfolio includes the Dancing Deer Baking Co. in Roxbury, Massachusetts. Last year, he gained mention in this space for a successful effort to overturn Romney’s calculated veto of an embryonic stem cell research bill (an effort that included uncharacteristically boisterous VC industry support).

This strong VC track record, however, is unfortunately marred by a lackluster electoral record. Gabrieli ran for Congress in 1998 (full disclosure: I worked on a competing campaign), but lost. He then ran for Lt. Governor in 2002, and lost again. He lost the first time, in large part, because he was a first-time politicians who was publicly hammered for trying to buy an election, and because he chose an incredibly difficult race that included the former mayor of Boston, the then-mayor of Somerville, a former lt. governor/talkshow host, two Boston city counselors, another VC and more. He lost the second time because he tied his horse to a lousy ticket top.

I haven’t seen any inter-Democratic polls on Gabrieli’s chance of getting the nomination – he’s a bit late to the game – but he’s running on what would likely be his Republican opponent’s greatest liability: An understanding of, and a dedication to, the innovation economy. Massachusetts is currently losing population, and is 46^th in job creation over the past few years. Some outsiders – and even insiders – might cite “Taxachusetts” as being the culprit, but our tax burden is now closer to middle of the pack.

Gabrieli believes that the best solutions are already here, and that we must foster existing in-state resources, including venture capital firms. He recognizes that the recent trend of new VC firm formation has been largely a West Coast phenomenon, and even worked to increase the state pension system allocation to in-state money managers (across all asset classes). Regular readers remember that HBS professor Josh Lerner disputes such a strategy from an ROI perspective, but admits that it might ultimately work to a state’s net advantage once job creation and other factors are considered.

“Twenty or thirty years ago, VC was really funding niche businesses that weren’t viewed as major economic drivers,” Gabrieli says. “But now the Massachusetts economy is based on VC-backed industries like IT and life sciences, and newer ones like clean technologies. An understanding of the VC business is enormously valuable.”

Again, it’s way too early to know if Gabrieli can shake off his wonkish image and get to the big dance in November. But he’s worth us keeping an eye on, because this state’s economy could use a VC perspective that many voters thought they were getting four years ago.