Fillat Balks at Joining GrandBanks, Lax

Andrew Fillat, former head of North American venture investing for Advent International, has decided not to join GrandBanks Capital, after the two sides failed to agree on a partnership structure.

Fillat joined Advent as a managing director in early 1989, and led investments in such companies as Interlink Computer Sciences Inc. (Nasdaq: INLK), Voxware Inc. (OTC BB: VOXW), Multipoint Networks Inc. (which merged with Wireless Inc. in 1998), Pelago Networks Inc. (now defunct) and CopperCom (which filed Chapter 11 and was then sold to Heico Co.).

Some of his transactions were late stage, but Fillat’s stated affinity was for startup deals in the IT space.

This dual strategy worked fine in the late 1990s, when Fillat oversaw one of the East Coast’s most active venture capital practices at Advent, which sported a stage agnostic focus that included deals for startup, growth and pre-IPO companies. The Internet bubble’s aftermath, however, involved major changes at Advent, including the gradual abandonment of early stage venture investing. Fillat began phasing himself out of the firm in late 2003 and quietly exited in December, with all of his remaining board seats reassigned.

It was at this time that he began regular conversations with old friend Charley Lax, co-founder of Mobius Venture Capital (f.k.a. Softbank Venture Capital) and Flatiron Partners (which is now part of JPMorgan Partners).

Lax had launched Newton, Mass.-based GrandBanks Capital in 2000 with backing from Softbank, but had been looking for a partner since the middle of 2001. He had gone almost all the way with several prominent Boston-area investors, but had been unable to close the deal due to disagreements over compensation and/or ultimate management control.

“Some partnerships are less equal than others,” says a source familiar with the situation.

Fillat provided Lax and GrandBanks with a couple of prospective deal opportunities, though neither ever received funding. Soon Fillat began discussing the available partner position. The pair seemed to reach an agreement in principle by early March, as Fillat sent out a “change of contact information” email on March 9 that identified him as a general partner with GrandBanks. The email also included a GrandBanks telephone number and email address. Moreover, Fillat is described as a member of GrandBanks on a website for the Boston Policy Activities League, where he serves as a director.

After that, however, Fillat got cold feet over that old GrandBanks bugaboo of partnership structure. “We could have been a good fit, if our mindsets had been the same,” Fillat says. “Charley is a good person who needs some additional team members, but I’ve decided not to proceed.”

Lax confirms that Fillat will not be joining the firm, and that GrandBanks has received employment interest from numerous other VCs. He adds that the firm does not yet need to raise a new fund, so that he doesn’t feel pressured to fill the spot. GrandBanks also is looking to add another associate, and recently hired former Testa, Hurwitz & Thibeault attorney Greg Jones as its chief administrative officer.

Fillat and Lax say that no finalized partnership agreement was ever signed, and that things like the updated contact email were premature.