In fact, First Round Capital was one of three finalists considered by a group of outside advisers assembled by PIDC to evaluate proposals, according to PIDC president John Grady.
The others were DreamIt Ventures, which operates business accelerator programs in Philadelphia, New York, Israel, and Austin, Texas; and a team of Safeguard Scientifics Inc. and Ben Franklin Technology Partners of Southeastern Pennsylvania.
Firms had to be willing to match $3 million that PIDC committed from its revolving loan capital.
In the end, First Round was a unanimous choice, Grady said. "There's no one better in the country in terms of experience and reputation," he said.
So once again, there was Mayor Nutter at City Hall Tuesday introducing Josh Kopelman, cofounder of First Round Capital, calling him a "vocal champion" of the city's start-up community.
The $6 million from the 10-year Startup PHL Seed Fund will be invested over the next three years with an average investment size of $500,000, Kopelman said. First Round will wave its management fee to run the fund.
Yes, that's a small amount of money. But small sums can tie tech start-ups to a region long enough for them to add employees to the point where it becomes expensive to relocate everyone, Kopelman said. In First Round's experience, that cutoff is about 15 employees.
Companies that accept money from the Startup PHL Seed Fund must agree to keep their operations in the city for 18 to 24 months, Kopelman said. After that, they're free to move wherever they feel they must to benefit their business.
AdMob, Invite Media, Milo and Warby Parker were all started in Philadelphia by alumni of Kopelman's alma mater, Wharton. All left the city after raising money from out-of-town investors, he said, and wound up creating a collective $1 billion in market value.
Besides losing some dynamic companies, Philadelphia lost a set of repeat entrepreneurs. Many of those company founders have started new ventures, Kopelman said. None are based in Philadelphia.
The good thing for Philadelphia is that one of the savviest tech investors on any coast is working to change that migratory pattern.
Contact Mike Armstrong
at 215-854-2980 or email@example.com, or @PhillyInc on Twitter. Read his blog, "PhillyInc," at www.phillyinc.biz.