Bostonians aren’t the only ones feeling the sting of losing headquarters
Losing headquarters is bad, bad, bad for a local or regional economy (or national, for that matter). Boston has become the un-Headquarters of America, or Branch Office USA, but is of course not the only city wrestling with that problem. Here’s an article from North Carolina regarding AllPosters swallowing the smaller, Raleigh-based Art.com.
Art.com became a darling of the local tech industry, proving that a dot-com with the right business plan could be successful. The founders never disclosed sales but said Art.com was profitable.
Signs of bigger ambitions began to appear in February. The company raised $30 million in funding, its first-ever venture financing. Chodniewicz, Marston and other investors received $9.9 million, according to a Securities & Exchange Commission filing.
The money, company officials said at the time, was supposed to help the business grow faster, possibly leading to an initial public offering of stock.
Merging with AllPosters.com could accelerate the process. By joining, the two companies have more scale and revenue. And they could be more attractive to potential investors. Private financial backers include Benchmark Capital, which was an investor in eBay, and Polaris Venture Partners, which has about $2 billion under management.
“This merger positions our combined company to continue and even enhance the rate of growth both companies have experienced ” Chodniewicz said in the statement.
Even so, losing a headquarters is a blow to the region. Headquarters jobs are among the most lucrative. They pay well and attract top talent. And having a headquarters can spark new investment in the community. Corporate leaders are more apt to invest in the areas they live.
Indeed, attracting more headquarters is a top priority of local economic developers — one highlighted by Art.com’s loss.
“It’s disappointing to lose a headquarters, especially with a young company that was growing,” said Harvey Schmitt, president of the Greater Raleigh Area Chamber of Commerce. “But the reality in today’s marketplace is that things are very fluid. Every time you have a merger, you’re going to have one area that probably does better. In this case we were on the wrong side of the merger equation.”
