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Saturday September 20, 2014

NY Convergence ORIGINAL

NY Tech Council: The Exuberant State of Investing and Startups (#NYTECH)

(l-r) Habib Kairouz, Warren Lee, Alan Patricof, Benjamin Wolin discuss the state of investing in the NY technology scene. (credit: Lauren Keyson)

By Lauren Keyson

The NY Technology Council held a VC Finance event at Citibank Center in Midtown late last week in order to update NY entrepreneurs on growth opportunities in the NY tech market.  The theme running throughout the evening was that the scene in the Big Apple is hot, and funders are on the lookout for the next big thing.  Over 500 NY IT, digital startups have been funded over the last three years and according to the panelists, NY is starting to see an influx of VCs, who are historically located in California and Boston, spending  more time in the city  They tend to come in and leave significant rounds of funding for these new companies.

Overall, the panelists felt that it is great to see those venture dollars being invested in NY and ultimately spent in NY, whether it’s hiring people or vendors or buying equipment.  Panelist Warren Lee, general partner at Canaan Partners said, “The state of investing and startups in the city is exuberant – I think the amount of money and startups being formed and created here is unparallel, which is great for the local tech scene.”

He had one warning regarding the risks both in the economy as well as globally. “The startups right now should think very carefully about the next 12 to 24 months,” he said.  “They need to make sure they are well funded or have strong investor syndicates or reach profitability or manage their expenses.”

A study of the tech marketplace by Gridley & Company found that there are 500+  private digital companies in New York;  120 investors who focus on NY digital companies and there are about 120 investors who focus on New York digital companies. The report also said that five private companies raised over $100 million, including Everyday Health, a company that provides information and tools to live a better life.  The CEO and co-founder, Benjamin Wolin, was a panelist at the event. He commented on the NYC tech landscape.  “I think the state of tech investing is great.  We started our company in 2002 when there was a lack of focus and energy. I think there is room to grow, but it’s a lot better than it was 10 years ago.”

According to Alan Patricof, founder and managing director of Greycroft, the startup/early stage venture world has never been stronger.  His company likes Internet-based, mobile and content-related companies. “I’ve been in the business 40 years. NY is the most exciting dynamic place in the country today, and that is keeping Silicon Valley in line. There is more business out there, but NY is moving from a lower basis — and is moving dramatically.”

Habib Kairouz, managing partner at RHO Road Capital Partners, has funded over 250 tech, biotech, clean tech and new media.  He too is thumbs up on NY’s Internet market.  “The venture industry and the new media sector has become a real vibrant sector because the whole ecosystem is in NY – the media and advertising companies are here.  You see serial entrepreneurs – one of the panelists here is on his second startup. It’s becoming very exciting.”

He continued, “We invest in people who want to change the status quo, who want to challenge the big companies out there that are doing things they could be done better. We are really investing in people at the end of the day. Ideas are great, but they have to morph with the markets, and it’s only great entrepreneurs that can do that.”

Tim Focus, venture capital practice executive at KPMG, works with venture backed growth stage companies in the Greater New York region with a focus on technology, ad tech, financial tech and digital media.  He sees an intersection of mobile and social, and is finding interesting opportunities around fashion in NYC.

“There is an outstanding NY startup economy, and the venture community is rising to finance new companies,” said Paul Ellis, managing member of the Paul Ellis Law Group and organizer of the event. “The New York technology scene is on a tear, it is a time of tremendous opportunity for local technology startups. It’s a very active environment in terms of new company formation as well as seed stage investing.”