tance of these programs at a time when scores of first-time entrepreneurs need the space—and the time—to develop a product, test it and find a market for it. They are particularly valuable in a city with some of the highest real estate prices in the nation and where few landlords are willing to enter into long-term leases with start-ups that have yet to make a profit. Some of the biggest changes have happened with accelerators. Indeed, New York was distinctly overlooked when the first wave of accelerator programs were birthed, beginning when Paul Graham launched Y Combinator in 2005. Under Graham’s model, Y Combinator invited entrepreneurs to submit proposals for innovative businesses to its panel of highly successful Web pioneers, who choose the 30 best teams of applicants to come out to Silicon Valley for live auditions. From that group, 12 or so are selected to participate. Each start-up chosen gets $6,000 while another $6,000
York City class in January 2011. According to David Tisch, managing director of TechStars in NYC, the number of start-ups applying to the program skyrocketed from 600 in that first class to 1,100 in the second program (July 2011) and 1,600 in the third program (March 2012). Other venture accelerators include Entrepreneurs Roundtable Accelerator, DreamIt NYC, FinTech Innovation Lab, First Growth Venture Network, Women Innovate Mobile, Founder Institute, Founder Labs, Blueprint Health, Startup Health Academy and Startl. While venture accelerators generally provide short-term space as part of a 8- or 12-week startup boot camp and offer an array of mentoring and coaching services in return for an equity stake in the company, incubators and coworking spaces provide longer-term space for young companies and entrepreneurs still looking to put together a team.
Prior to 2009, there were no tech “accelerators” in New York City. Now, there are at least a dozen. is awarded to the founder (average age: 25) to get them through a three-month product development boot camp. The teams are mentored throughout and eventually present their products to a roomful of seasoned investors at Demo Day. But in the past few years, a dozen of these programs have arisen in the five boroughs. “In 2009, SeedStart was the only accelerator program in the city,” says Owen Davis, managing director of NYCSeed, which created the venture accelerator program. “By the summer of 2011, I counted 9 accelerator programs in the city.” “Every day you see a new accelerator,” adds David Rose of New York Angels and Gust. By far, the most well-known is TechStars, which operated accelerator programs in Boulder, Boston and Seattle before starting its first New
Center for an Urban Future
New York is home to a handful of incubators that cater to tech firms. NYU Poly runs two incubators that are funded in part by the city’s Economic Development Corporation. Together, the two facilities—one on Varick Street that was founded in 2009 and another in DUMBO that opened in January 2012—are home to 38 companies today and 12 start-ups have already graduated into larger space. Betaworks is not a typical incubator in that it makes investments in companies. Its website points out that it isn’t actually an incubator. But since it was founded in 2007, Betaworks has housed a number of young tech firms at its space in the meat-packing district and has taken pride in “creating” and “scaling” companies, including Bit.ly and chartbeat.
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New Tech City