NYC is the next Venture Capitol presentation 3 14
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Transcript of NYC is the next Venture Capitol presentation 3 14
5 MAR 2014 | PAGE1
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 | PAGE2
• 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
NYC Is the Next Venture Capitol
5 MAR 2014 | PAGE3
• 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”
NYC Tech Myths and Issues
5 MAR 2014 | PAGE4
Success Stories
Scaling Startups
Magnet for Talent
Ultimate Access
Vibrant Community
World Class Academia
Tech Giants Moving In
A Capitol For Capital
Poised to Create Massive Successes
• 1.2K+ Tech Startups10
• 375+ Tech Meetups11
² Total 320K Members12
² NYTM 35K Members13
• 80+ NY City Govt Programs14
• 45+ Co-Working spaces15
• 60+ Incubators/Accelerators16
• 110 Universities in Region17
² 14 of Top 100 Schools18
² 500K+ Students19
• Applied Sciences NYC20
• Academy for SW Eng /21
Bronx Academy for SW • CSNYC22
• Google: 3.2K+ FTEs23
• Amazon: 110K Ft2 24
• Facebook: 100K Ft2 • Yahoo: 270K Ft2
• Capacity = 4K-6K+ FTEs
• Largest City Econ $583B25 • #2/#3 in VC Funding26
• $13.6B Raised Since 200627
• #1 in VC $ invest growth28
• Admeld (Acq $400m) • Buddy Media (Acq $700m) • Indeed.com (Acq $1b) • MakerBot (Acq $400m) • Shutterstock (IPO$2.3b) • Tumblr (Acq $1.1b)
• 262K+ Tech FTEs1
² 150K Highly-Skilled2
² 26K added since 20073
• #1 Locale Top 5 Undergrad4
• #1 Women Entrepreneurs5
• #1 for H1-B Visas 20126
• Salaries/Rent Lower than SF/SV7
• #1 City F500 HQs (45)8
• Traditional: Advertising, Fin Services, Fashion, Media, Info Svc, Design
• Tech: 8.6K+ Companies9
• MongoDB • AppNexus • OnDeck • Gilt • ZocDoc • Varonis
• Kickstarter • BetterCloud • Etsy • Shapeways • Outbrain • tracx
• 27 of the BI Digital 100
5 MAR 2014 | PAGE5
Startup Lifecycle
IPO
Initi
al In
vest
men
t
Follow On Investment & M&A
9.5 years29
Dead Pool
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Funding On Track
SOURCE: Thomson Reuters, CrunchBase30
Looking at VC financings over the past decade, by round and dollars, this generation of tech startups began in late 2005, early 2006.
# per Round Category
5 MAR 2014 | PAGE7
Funding On Track
SOURCE: Thomson Reuters31
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, CrunchBase31
$ per Round Category
5 MAR 2014 | PAGE8
Funding On Track
SOURCE: Thomson Reuters31
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, CrunchBase32
Investment Size
5 MAR 2014 | PAGE9
Startup Growth Outpaces Competitors
SOURCE: The Atlantic, Martin Prosperity Institute33
1159
112
71
Silicon Valley
Seattle
Chicago
LA/San Diego 87 Austin
105 Philadelphia
117 DC Metro
408
Boston
NYC
379
335
Total Number of VC Investments 2012
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Great Exits / Massive Winners on Track
IPO
SOURCE: Thomson Reuters
Financings $13.6B+ Raised
Since 200634
IPO
5 MAR 2014 | PAGE11
Great Exits / Massive Winners on Track
IPO
SOURCE: Thomson Reuters
IPO
Scaling Startups Dozens of Startups
Surging Towards IPO
5 MAR 2014 | PAGE12
Great Exits / Massive Winners on Track
IPO
M&A 554 Transactions
Since 200635
SOURCE: Thomson Reuters
IPO
5 MAR 2014 | PAGE13
Great Exits / Massive Winners on Track
SOURCE: Thomson Reuters
IPO
IPOs 2013:
7 Completed, 1 Filed36
5 MAR 2014 | PAGE14
Much More than New Media
AdTech
eCommerce
Fashion
FinTech
Enterprise 2.0
Analytics
EdTech
Hardware 2.0
Video/Photo
Health/Fitness
5 MAR 2014 | PAGE15
• 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?
The NYC X Factor
5 MAR 2014 | PAGE16
• 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 | PAGE17
The Multiplier Effect
5 MAR 2014 | PAGE18
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 | PAGE19
• 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?
Core Questions
SOURCE: Endeavor Global
5 MAR 2014 | PAGE20
• 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
Conclusions
5 MAR 2014 | PAGE21
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 6 H1 Base 25 Partnership for New York City, NYC Jobs Blueprint, p. 13 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 11 Meetup.com Research 30 Thomson Reuters Analysis – See slide 19 12 Meetup.com Research 31 Thomson Reuters Analysis – See slide 19 13 NY Tech Meetup Research 32 Thomson Reuters Analysis – See slide 20 14 Promoting Entrepreneurship in NYC, NYEDC p2 33 The Atlantic / Martin Prosperity Institute Updated with 2012 Data from ??? 15 Mark Birch Research 34 NY VC Almanac, p. 7 16 Mark Birch Research 35 <Thomson Analysis> - Add rationale 17 AON / Partnership for New York, p. 11 36 Yahoo Finance: Shutterstock, Tremor Video; SEC Filing: Varonis 18 US News & World Report 19 AON / Partnership for New York, p. 11
Footnotes / Links
5 MAR 2014 | PAGE22
• 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
Industry Taxonomy : Financings
5 MAR 2014 | PAGE23
• 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
Industry Taxonomy : M&A