1. New York
Concrete jungle where dreams are made of
There's nothin' you can't do
Now you're in New York
These streets will make you feel brand new
Big lights will inspire you
David Aronoff,
General Partner
Flybridge Capital Partners
With Great Thanks to InSITE Fellows
Patrick Chang, David Lerman, Zak Schwarzman
5 MAR 2014 | PAGE1
2. NYC Is the Next Venture Capitol
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•
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•
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NYC is on track to create $Billion tech companies
Myths and Issues
Let the data speak
Keys to success rely on city’s secret weapons
Conclusions
5 MAR 2014 | PAGE2
3. NYC Tech Myths and Issues
• Talent – “We need more people, particularly technical hires”
• Costs – “It’s just too expensive to build startups in NYC”
• Funding – “There are plenty of angel and early stage investors
in NYC, but later stage investment funds are hard to find”
• Exits – “New York City is short on massive tech stories”
• Sectors – “AdTech, FinTech, Fashion, Media & nothing else”
5 MAR 2014 | PAGE3
4. Poised to Create Massive Successes
Success
Stories
• Admeld (Acq $400m)
• Buddy Media (Acq $700m)
• Indeed.com (Acq $1b)
• MakerBot (Acq $400m)
• Shutterstock (IPO$2.3b)
• Tumblr (Acq $1.1b)
Scaling
Startups
• MongoDB
• AppNexus
• OnDeck
• Gilt
• ZocDoc
• Varonis
• Kickstarter
• BetterCloud
• Etsy
• Shapeways
• Outbrain
• tracx
• 27 of the BI Digital 100
Vibrant
Community
• 1.2K+ Tech Startups10
• 375+ Tech Meetups11
12
² Total 320K Members
13
² NYTM 35K Members
• 80+ NY City Govt Programs14
• 45+ Co-Working spaces15
• 60+ Incubators/Accelerators16
World Class
Academia
• 110 Universities in Region17
18
² 14 of Top 100 Schools
+ Students19
² 500K
• Applied Sciences NYC20
• Academy for SW Eng /21
Bronx Academy for SW
• CSNYC22
Magnet for
Talent
Ultimate
Access
• 262K+ Tech FTEs1
• #1 City F500 HQs (45)8
2
² 150K Highly-Skilled
• Traditional: Advertising,
3
² 26K added since 2007
Fin Services, Fashion,
4
• #1 Locale Top 5 Undergrad
Media, Info Svc, Design
• #1 Women Entrepreneurs5
• Tech: 8.6K+ Companies9
• #1 for H1-B Visas 20126
• Salaries/Rent Lower than SF/SV7
Tech Giants
Moving In
• Google:
• Amazon:
• Facebook:
• Yahoo:
• Capacity =
3.2K+ FTEs23
110K Ft2 24
100K Ft2
270K Ft2
4K-6K+ FTEs
A Capitol
For Capital
• Largest City Econ $583B25
• #2/#3 in VC Funding26
• $13.6B Raised Since 200627
• #1 in VC $ invest growth28
5 MAR 2014 | PAGE4
6. Funding On Track
# per Round Category
Looking at VC financings over the past decade, by round and dollars, this
generation of tech startups began in late 2005, early 2006.
SOURCE: Thomson Reuters, CrunchBase30
5 MAR 2014 | PAGE6
7. Funding On Track
$ per Round Category
Looking at VC financings over the past decade, by round and dollars, this
SOURCE: Thomson Reuters31
generation of tech startups began in late 2005, early 2006.
SOURCE: Thomson Reuters, CrunchBase31
5 MAR 2014 | PAGE7
8. Funding On Track
Investment Size
Looking at VC financings over the past decade, by round and dollars, this
SOURCE: Thomson Reuters31
generation of tech startups began in late 2005, early 2006.
SOURCE: Thomson Reuters, CrunchBase32
5 MAR 2014 | PAGE8
9. Startup Growth Outpaces Competitors
Total Number of VC Investments 2012
Boston
Seattle
Silicon Valley
408
112
Philadelphia
71
1159
Chicago
379
117
NYC
DC Metro
335
LA/San Diego
105
87
Austin
SOURCE: The Atlantic, Martin Prosperity Institute33
5 MAR 2014 | PAGE9
10. Great Exits / Massive Winners on Track
Financings
$13.6B+ Raised
Since 2006
34
IPO
SOURCE: Thomson Reuters
5 MAR 2014 | PAGE10
11. Great Exits / Massive Winners on Track
Scaling Startups
Dozens of Startups
Surging Towards IPO
IPO
SOURCE: Thomson Reuters
5 MAR 2014 | PAGE11
12. Great Exits / Massive Winners on Track
M&A
554 Transactions
Since 2006
IPO
35
SOURCE: Thomson Reuters
5 MAR 2014 | PAGE12
13. Great Exits / Massive Winners on Track
IPO
IPOs
2013:
7 Completed, 1 Filed
36
SOURCE: Thomson Reuters
5 MAR 2014 | PAGE13
14. Much More than New Media
AdTech
eCommerce
Fashion
FinTech
Analytics
EdTech
Hardware 2.0
Video/Photo
Health/Fitness
Enterprise 2.0
5 MAR 2014 | PAGE14
15. The NYC X Factor
• NYC always welcomes newcomers – tech no different
– 350+ tech meetups with more than 320K+ members
– NYTM is the pinnacle, with more than 35K members
• Easy to see that community is core to NYC’s success
• But is there a way to analyze impact more quantitatively?
5 MAR 2014 | PAGE15
16. • Endeavor is a global not-for-profit that catalyzes countries’
economic growth through high-impact entrepreneurship
• To support their mission, Endeavor’s research group has
mapped the startup genome around the globe, asking
founders of tech startups key questions, including:
–
–
–
–
–
Who INSPIRED you to become an entrepreneur?
Where were you EMPLOYED before becoming an entrepreneur?
Who INVESTED in your company?
Who MENTORED you as you built your company?
Have you FOUNDED any additional companies?
• They capture the results in diagrams that depict the DNA of
communities and its multiplier effect.
5 MAR 2014 | PAGE16
18. The Multiplier Effect
• Data gathering is expected to be complete by January
• So far 700+ companies connect to one another and preliminary data
is challenging conventional wisdom within sector…
SOURCE: Endeavor Global
5 MAR 2014 | PAGE18
19. Core Questions
• DoubleClick employees founded more than 20 companies
in NYC tech, and account for more than 30 CEOs in the city
• From which universities do NYC Tech founders graduate?
• What is the longest chain of connections in NYC Tech? It’s 8
companies long in Buenos Aires.
• How many entrepreneurs have the most inspirational
community members inspired?
• Which are the most influential companies/organizations?
• How many “generations” until the tech ecosystem is
largely self-sustaining in terms of human resources?
SOURCE: Endeavor Global
5 MAR 2014 | PAGE19
20. Conclusions
• The NYC Tech community has catapulted to a leading
entrepreneurial center in only 7 years
• Massive M&A exits, established leaders across multiple
sectors, combined with strong growing IPO pipeline
position NYC well
• No dispute that NYC has arrived if in 24-36 months:
– Talent: Multiplier effect continues to grow exponentially
– Funding: Remains consistently #2 or #3 for venture capital in US
– Exits:
Cohort on runway yields 2-3 multi $B public companies
5 MAR 2014 | PAGE20
21. Footnotes / Links
1
Building a Digital City: The Growth and Impact of New York
City’s Tech/Information Center, p. 2
20
Partnership for New York City, NYC Jobs Blueprint, p. 25
2
Partnership for NYC
21
Academy for Software Engineering
Bronx Academy for Software Engineering
3
Building a Digital City: The Growth and Impact of New York
City’s Tech/Information Center, p. 2
22
The Computer Science Education Foundation of New York City
4
LinkedIn Research
23
WNYC
5
Startup Ecosytem Report Part 1, p. 35
24
NYC Real Estate Broker's estimates
Partnership for New York City, NYC Jobs Blueprint, p. 13
6
H1 Base
25
7
Angel List Research
26
NYC TechCity, p. 8
8
Fortune
27
NY VC Almanac, p. 7
9
NYEDC, p 4 Economic Research and Analysis, Tech Trends
August 2013
28
The Atlantic / Martin Prosperity Institute
10
NYC TechCity, p. 1
29
SEC Filing Analysis
Meetup.com Research
30
Thomson Reuters Analysis – See slide 19
Meetup.com Research
31
Thomson Reuters Analysis – See slide 19
NY Tech Meetup Research
32
Thomson Reuters Analysis – See slide 20
Promoting Entrepreneurship in NYC, NYEDC p2
33
The Atlantic / Martin Prosperity Institute Updated with 2012 Data from ???
Mark Birch Research
34
NY VC Almanac, p. 7
<Thomson Analysis> - Add rationale
Yahoo Finance: Shutterstock, Tremor Video; SEC Filing: Varonis
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12
13
14
15
16
Mark Birch Research
35
17
AON / Partnership for New York, p. 11
36
18
US News & World Report
19
AON / Partnership for New York, p. 11
5 MAR 2014 | PAGE21
22. Industry Taxonomy : Financings
• The following taxonomy was used for industry data
filtering for financing activity 2006 – present, slide 6 & 7
• Additionally, a 40 mile radius around NYC was used for
inclusion of company data
5 MAR 2014 | PAGE22
23. Industry Taxonomy : M&A
• The following taxonomy was used for industry data
filtering for M&A activity 2006 – present, on slide 8
• Additionally, a 40 mile radius around NYC was used for
inclusion of company data
5 MAR 2014 | PAGE23