Big venture news broke yesterday in a hurry – ten year partner at Atlas Venture Fred Destin is on his way out and moving home to Europe, and former Flybridge partner Jon Karlen will be joining Atlas. The news came as a huge surprise to the community as Destin has been one of the most vocal cheerleaders of Boston startups since moving here.
Along with the news came a number of rumors regarding Destin’s relationship with Atlas’s newest partner, Chris Lynch. Rumors ranged from the two simply not getting along to the whispers there may have even been a physical altercation at one point. As I arrived in the office yesterday, the two were indeed together in Lynch’s office… fake boxing. No joke.
“Even though Chris and I often disagree, we actually have a great relationship,” Destin told me face to face yesterday. “I spend more time with him out of the office than any other partner, and when I need personal advice I’ll get a glass of wine with Chris. He’s my trusted person when I need life advice.”
If you know both Destin and Lynch, they are two vocal and opinionated guys, so it should come as no surprise that the two may have had some choice words when their opinions differed. In fact, Destin and Fagnan both agreed the two (Lynch and Destin) butted heads a number of times, but not when it came down to their personal lives or the future of Atlas Venture.
While some in the community have focused on Destin and Lynch’s relationship, the departure actually came down to a conversation between Destin and Fagnan. Back in January of this year, the two sat down to discuss the future of the fund. The conversations initially started around the need to hire additional partners and who the two like. It then morphed into a partner swap discussion as Destin was unsure if he could stay in Boston for another 10 years (typical lifecycle of a new fund) as his family life was pushing him back home. “We even discussed the option of opening Atlas Europe again,” Destin said jokingly as that office was shut down a few years ago.
While I expected to be presented with a united front while over at Atlas, after talking in depth with Destin, Jeff Fagnan and Ryan Moore, it’s clear that they are sincere about the situation and Fred’s desire to take his family back to Europe and begin to focus on planting permanent roots. In fact, sources have suggested, that many of the rumors surrounding Destin’s departure have been perpetuated by a member of the early stage investment community who has had a number of disagreements with both Destin and Lynch.
Moving forward, Destin is planning on heading back to London and staying in venture capital. He wouldn’t comment on where, but there have been rumors that he’s had a number of offers over the years from European funds. It also sounds like he’s planning on working on some passion projects.
“Venture is a young man’s game, and you have to always be setting yourself up for the next move,” said Destin. “Look at what Jeff [Fagnan] is doing outside of venture with TUGG and some of the non profits, I’m looking to get more involved with charities, give back more and some day get into teaching. London is where my family, my wife’s family and most of our friends are, it’s perfect timing for my family to head back to Europe.”
While Destin won’t talk about where he’s going, there are a couple of suitors that would be ripe for him. I wouldn’t be surprised if he ended up at Balderton Capital or Highland’s Europe office, but that’s just goss for now.
As part of the move all but one of Destin’s board seats will be transitioned to either Karlen or Lynch. Destin is holding on to Zoopla as the company is based in the UK. Destin’s European based investments over the past few years have been the strongest in his portfolio.
“I came to Boston thinking it was dead in the water, and now I am completely blown away by the startup community. I love this city and will miss a lot of the people here especially the companies whose boards that I sat on – our relationships were bigger than that.” Destin said to me while looking a little emotional.
Even though Destin’s leaving is a loss for Boston, Atlas has quickly filled his seat with a very competent replacement in Karlen. Fagnan told me yesterday the firm plans to start raising their tenth fund next summer and may possibly hire another partner.
The goal for this new fund is to raise $250 million by next year, about the same size as their ninth. Fagan even eluded that their plan is to raise $250 million every 2.5 years. Aggressive but doable.
“I want us to be the ‘drop the mic’ firm here in New England,” said Fagnan.
Of that $250 million about $150 will go to tech with another $100 going to life sciences. With five partners in tech, that’s about $30 million a partner to invest, most of which will be seed stage. Atlas’s goal is to be the go to source for seed and Series A funding in New England. What was interesting to learn is that unlike most firms, Atlas’s partners all receive the same salary and carry.
Atlas’s strategy and style are no doubt unique and have brought much needed energy to the Boston ecosystem. While Destin will be missed in Boston, Karlen is a strong addition to the Atlas investment team.
From all of us at BostInno, best of luck with your move and what comes next, Fred.