Atlas Venture Reorganizes, Fred Destin Heads To U.S.

One year ago next week, I wrote about how Atlas Venture had slimmed its personnel roster after a disappointing fund-raising drive.

Now, the firm is making additional changes. Atlas has opted to consolidate its deal-making and operational activities within its Waltham, Mass. office (which could soon relocate closer to, or within, Boston). That means no more deals coming out of London, even though Atlas will maintain a few staffers on the ground there for portfolio management and investor relations purposes.

London-based partner Fred Destin will relocate to the U.S. (he’s already bought a house in Brookline), while fellow London-based partners Graham O’Keefe and Regina Hodits will become venture partners (i.e., continue to work with their existing portfolio companies). Chris Spray will continue to serve as a partner focused on LP relations and portfolio management, but is not expected to make new deals nor stay on when Atlas eventually raises its next fund. There also are a few junior/backend layoffs in London, while Waltham-based venture partner Jeff Andrews is leaving to become head of strategy for an Atlas portfolio company.

I had lunch yesterday with Atlas partner Jeff Fagnan, to understand what all of this means. He said that the consolidation decision is not an abandonment of the European venture market, but rather a recognition that the firm works better when its principals are all sitting around the same table. He noted that Atlas used to also have offices in Paris and Munich, and that it created a bloated and confusing process. “You’d show up, and there’d be this huge table with three video screens,” he said, before emphasizing that Atlas will continue to make new European deals.

Fagnan also emphasized that these moves are not being driven by overhead concerns. I tend to believe him on this, given that Atlas has retained a search firm to find it a new IT-focused partner.

Stepping back for a moment, Atlas is simply the latest in a long line of venture firms to step back from on-the-ground operations in Europe. When I began doing this job (or something like it) around ten years ago, it seemed every U.S.-based shop was opening a London office. Now I can only think of a very small handful (Accel Partners comes to mind), although plenty still make investments there.