New York is quickly proving itself an important player in the startup space. Last week, I attended two major events in Manhattan.
First was SwitchPitch, where established companies pitched their technology needs to vetted startups. (Traditionally, startups pitch their companies to more recognized organizations.) Held at NYU's Skirball Center, the event featured 22 innovation projects outlined by the New York Daily News, HBO, Time, Pitney Bowes and other established businesses. Approximately 450 people from the international startup community attended the presentations, which represented more than $500,000 in project budgets ready for execution.
Then there was Israeli Tech Made in NY, hosted by Worldwide Investor Network and held in a Morgan Stanley conference room. Developed in cooperation with the Israeli Economic Mission in NY, the event introduced top Israeli startups to the New York venture capital and startup community. Startups presenting their solutions for the U.S. market had already raised at least $750,000 in funding and were seeking close to an A or B level investment round within the next year.
Both events stressed New York's relatively recent prominence in the world of entrepreneurship. Founder and Chairman of Gilt, Kevin Ryan, gave the SwitchPitch keynote speech, which described how the tech scene has changed since the 90s. In 1996, there were no startups in New York. One could not even find a lawyer to take a company public. Around 1999, the startup scene was booming. On the West Coast. entrepreneurs were not convinced that they would succeed in New York because there wasn't enough of an ecosystem for support.
Ryan notes, "Silicon Valley is still substantially larger than New York and particularly dominant in enterprise software. New York is becoming the center in online media, ad technology and very strong in ecommerce with a growing presence in everything else." Big media startups like Huffington Post, Gawker and Business Insider are based in New York because that's where the journalists are found. He says, "The tech scene in New York has exploded from an insignificant tiny industry to a huge sector with many tens of thousands of jobs and billions of dollars of payroll."
The East Coast will keep taking market share in the startup and tech spaces.
SwitchPitch Founder, Michael Goldstein notes:
From our DC event, Gannett is in negotiations with a Google Glass developer to execute on a development project. Large companies need to innovate faster – startups are nimble and provide creative, innovative solutions. The most important thing at the event for startups is forming a face-to-face relationship with decision-makers at presenting companies.
Motley Fool CFO Ollen Douglas is devoted to helping the world invest better. He stated that Motley Fool is excited to play a role in this innovative reverse pitch approach to matching startups and established companies. It's a "great opportunity to gain access to, and work with the very talented and deep New York startup community," he said. "I don't know of other opportunities where a company can efficiently and effectively get an audience with 300 to 400 entrepreneurs in one afternoon."
At the Israeli Tech in NY event ( standing room only), entrepreneurs followed the more traditional model of pitching themselves. Their agendas included meeting face to face with six highly-desired investors/funds based in the city, interacting with six potential clients/partners, attending four networking events and pitching their solutions to more than 100 of the top investors in New York over the span of three days.
WIN Founder, Eyal Bino explains his interest in Isreal,
Innovation in Israel is at its peak these days with over 5,000 startups currently running in Tel-Aviv. Yet, many of them are experiencing extreme challenges in expanding globally due to lack of expansion capital available and traction expected in order to become an attractive opportunity for US investors. Data shows that having US presence is critical to ultimate growth and success, in addition to attracting the attention of the local venture community.
Next year, Bino plans to launch Catalyst to post-seed Israeli startups looking to expand to N.Y. His new venture aims to bring founders of top Israeli startups to New York City for 6 months, provide them with $100,000 in cash, and $100,000 in additional services including business development, sales, marketing, office space and U.S. talent recruitment. The intention is to build their presence here and provide a runway for proof of concept in the U.S. market. Combined with the strategic network of investors, mentors and partners who are big part of the city's ecosystem, companies will have a huge advantage in attracting Series A funding and expanding their ventures to NY.
East Coast prominence in the startup scene will undoubtedly continue to draw talent from Israel, as well as the rest of the world. Expect continued growth in entrepreneurial ventures in addition to the businesses that fill the rest of their support ecosystem.
Ryan expects "the national internet economy [to] continue to grow substantially and probably double again in size over the next 3-4 years. Things are going extremely well – the industry continues to attract many of the brightest young execs."
Lisa Chau is a private consultant focused on social media and cross–platform marketing. Previously, she spent five years working for her alma mater Dartmouth College, as assistant director of alumni affairs and assistant director of PR for the Tuck School of Business. She has also taught at MIT, and guest lectured MBA and undergraduate courses in e-business Strategy at Baruch College and The New School .
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