Volition Capital is rare Boston VC firm expanding in 2024
While it seems many venture capital investors are stepping back, the three managing partners of Volition Capital in Boston say they are doubling down.
Some rival VC firms in the area have turned to new leadership or scaled back investing amid a generational shift. But Volition, spun out of Fidelity Investments 14 years ago, last year raised $675 million for its fifth and largest fund, which is keeping founders Sean Cantwell, Larry Cheng, and Roger Hurwitz busier than ever.
“We think great businesses — this is proven over time — are built in markets like this, where fund-raising is a little tighter and it’s harder for entrepreneurs to get funding,” Cantwell said in an interview from the firm’s Back Bay offices overlooking the Christian Science Plaza.
Volition did have one retirement last year. Managing partner Andy Flaster, who was the chief financial officer of Fidelity private equity before helping found Volition, retired in June. But across Boston and deep into Silicon Valley, VC firms have lost some of the biggest names in the business. The departures come amid a continuing downturn in the business. Startups in Massachusetts raised $16 billion last year, down 52 percent from the market peak in 2021. And local VC firms raised less than $6 billion for their funds, down 64 percent from 2021.
Volition’s new fund was a rare 2023 bright spot for VC in Boston and increased the firm’s total assets under management to $1.7 billion. It also prompted an effort to expand.
Longtime Boston tech entrepreneur Pete Lamson joined this month as chief operating officer with a mandate to expand Volition’s startup support unit. Lamson said that will include offering HR, finance, and sales support to companies that Volition has invested in. The firm, which has more than 40 people currently, is hiring for the effort, he said. “We’ll be adding more headcount here — but I wouldn’t expect a massive hiring to support this,” Lamson said.
Lamson has plenty of experience working in startups — and the gray hair to prove it. His career spans the early 1990s recession, dot-com bust, and 2008-09 financial crisis, he noted.
Most recently, he was chief executive of HR software company Employ in Waltham for three years after it acquired JazzHR, his own HR tech startup (financed by Volition). Previously, he was head of global sales at Boston data storage company Carbonite as it went public and was chief operating officer of job site Monster Worldwide’s relocation business during the dotcom crash.
The current tough market for startups reminded Lamson of the opportunity to create strong companies.
“I see history repeating itself,” Lamson said. “The kind of retrenchment we saw over the last couple of years forces both investors and entrepreneurs to be more disciplined in their approaches . ... This is going to lead to the next wave of high-growth, really solidly built companies.”