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Powering New York’s Startup Ecosystem:
An Economic Impact Analysis of NYU-Poly’s Incubator Initiatives
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“We want New York City to be the most welcoming city in the country for people who want to start a business. The incubator program is a prime example of what government can do to help create that environment and spur job creation.”
-NYC Mayor Michael R. Bloomberg, August 18, 2011 launching New York City’s First Sponsored Incubator at 160 Varick St.
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Study Overview: NYU-Poly IncubatorsChanging The Landscape of a City for the
Better • Creating Successful Businesses
• Creating Jobs
• Revitalizing the Local Real Estate Market
• Supporting Entrepreneurship
• Generating Wealth
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The Model
Helping Startups Achieve ‘Escape Velocity’ through:
• Capital• Customers• Expertise• Service• Multiplied by Community
Tackling Common Friction Points: • Lack of Funding• Lack of Affordable Space• Hard to Find Engineering
Talent• Inadequate Information
Infrastructure
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Timeline
2009 Two incubators launched in Hudson Square, Manhattan
• “Varick Street Incubator”• “NYC ACRE” (Accelerator for a Clean and
Resilient Economy)
2012 Third incubator opens in DUMBO, Brooklyn
• “DUMBO Incubator”
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NYU Poly Incubators by the Numbers
3 Incubators
102 Total companies in the incubators since 2009
900 Total jobs generated by incubator activity
59 Companies currently in the incubators
35 Companies graduated to a larger space in NYC
5 Companies acquired
$ 60M Raised by incubator companies to date
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Some Additional Facts
• Varick Street- Fosters: Adtech, cyber security, financial tech, information
tech and social media startups- Current tenants: 30- Graduates: 26
• NYC ACRE- Fosters: Clean tech and green energy startups- Current tenants: 10- Graduates: 8
• DUMBO- Fosters: digital media, mobile and gaming startups- Current tenants: 19- Graduates: 1
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Spotlight: NYC ACRE NYC’s Flagship Accelerator for a Clean and
Resilient Economy
• NYC ACRE began with a grant from NYSERDA to NYU-Poly which has been extended through 2017
• Focus on capital efficient, IT driven energy-related tech– 9 ACRE companies were selected for NY Greentech 50 List– 112 new full-time jobs created – 10 current tenants – 8 graduates – 2 acquisitions– Interest from international clean energy companies
establishing a US HQ – $22.7 million raised to date
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Inaki Berengeur: Co-Founder, Pixable Owen Davis: Managing Director, NYC Seed
Shelley Harrison Ph.D: Senior Advisor, Coller Capital Habib Kairouz: Managing Partner, Rho Ventures
Evan Korth: Co-Founder, HackNY; Associate Prof. NYU Courant Peter Nager: Senior Managing Director,
Egret Capital Laurie Racine: Founder, Managing Director, Startl Ventures Frank Rimalovski: Managing Director,
NYU Innovation Venture Fund Mark Wachen: Managing Director, DreamIt NYC
Advisors
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Economic Impact Analysis: Methodology
• The survey was conducted from October 2012-January 2013. (All statistics are as of December 2012.)
• Went to 102 tenants, current and previous. 35 companies responded
(a 30% response rate)– 24 current tenants– 11 graduated companies
• One-on-one interviews with six selected companies• IMPLAN multipliers used• Team led by Dr. Jill Kickul at NYU Stern and supporting members
from Harley & Co. and Zain Yousaf; experience analyzing incubators all over the world
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Key Findings
• Incubators are drivers of significant economic activity
• Foster production of ground breaking technologies in diverse industry sectors
• Benefit businesses through public/private participation and academic resources
• Strengthen NYU-Poly academically
• Create Good Jobs
• Attract Significant Capital
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Economic Impact
• Through both direct and indirect job creation, taxes and spending, the incubators have had an economic impact of $251.2 million as of December 2012
• By 2015, the impact is projected to be $719.8 million
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Projected Economic Impact: Multipliers Applied
Year Total Economic Impact
Total Jobs Direct Jobs Indirect Jobs Induced Jobs
2009-2012 $251.2M 900 562 221 117
End of 2013 $352.4M 1270 808 285 175
End of 2014 $500.1M 1800 1150 400 250
End of 2015 $719.8M 2580 1650 570 350
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• All data is cumulative and based on extrapolation of survey data to produce employment estimates encompassing all incubator companies
• Indirect and total job estimates and economic impact based on IMPLAN multipliers
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Projected Economic Impact: Multipliers Applied
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Strong Job Creation
• As of December 2012, NYU-Poly Incubators have created 900 jobs
• By 2015, NYU-Poly Incubators will have created nearly 2,600
jobs • The average graduate of NYU Poly incubator earns $72,230 a
year • It is estimated that former and current NYU Poly Incubator
members contributed $31.4 million in tax revenue from 2009 to 2012
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Projected Tax Revenues
Tax figures include personal (payroll, income, etc.) and business taxes
Year Total State and Local Federal
2009-2012 $31.4M $21.0M $10.4M
End of 2013 $44.7M $30.1M $14.6m
End of 2014 $63.7M $42.9M $20.8M
End of 2015 $91.7M $61.7M $30.0M
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• The average funding growth rate for current tenants is 147%
• There is no shortage of capital once startups leave the incubators
• More than $60 million in private funds has been raised by incubator companies to date
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Capital Raised
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Capital RaisedAverage Annual Funding and Revenues by
Year
2009 2010 2011 2012
Current Tenant
$34,667 $55,000 $213,263 $413,722
Graduated Tenant
$386,455 $364,545 $742,727 $1,898,485
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Strengthening Local Economies
• 100% of companies surveyed stated that their firm is headquartered in the NY/NJ region
• Once they graduated our companies go on to lease an average of
1,671 square feet in New York City
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New York’s Tech Scene is Growing
• New York ranks 2nd in total startup activity and 3rd in venture funding
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1 - San FranciscoTotal Startups: 3,442; Apple, Facebook, Google, Twitter$11.8 billion invested in 430 companies
2 - New YorkTotal Startups: 1,844; Foursquare, Tumblr, Fab.com$2.7 billion invested in 332 companies
3 - Los AngelesTotal Startups: 1,507; Break Media, Demand Media, Viddy Citysearch$2.0 billion invested in 129 companies
4 - BostonTotal Startups: 700; TripAdvisor, Kayak.com, Carbonite $2.8 billion invested in 285 companies
5 - Washington DCTotal Startups: 261; LivingSocial$979 million invested in 146 companies
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The University Connection
• Allows faculty to work alongside engineers to bring their work to market
• Brings high-quality work
experiences to student interns
• Provides human capital that tech companies NEED that cannot be found elsewhere
• 250 Student Positions Created
• 8 Faculty Engineers in Residence
• 12 Faculty Consulting Projects
• 12 Links to Departments, Programs, Center and Labs
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The Case for University-tied Incubators
• Our companies are here because of….– ‘The opportunity to network.’
– ‘The favorable image and location.’
– ‘The quality, price and flexible terms of the incubator units.’
– The tie to the university; for example, 85% of companies have employed university student interns
– 84% of companies said that the incubator experience was important or extremely important to their overall success
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Internships @ The Incubator
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Grad students intern for incubator teams
Startups get real value, build talent
Inspired students emerge
with real experienc
e
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University Progress and Momentum
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RECORD
9ARSFAWARDS
INVENTIONDISCLOSURESINCREASE
37% $ONEBILLIONLICENSINGINCOME
RECORD
9STARTUPS FORMEDBASED ON NYU IP
11NYU SCHOOLSIN 2012 NYUENTREPRENEURSCHALLENGE
9NEW STUDENTENTREPRENEURSHIP CLUBS FORMED
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Good Exits
• Five Acquisitions (including 3 NYU affiliated companies) totaling over $50 million dollars
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nRelate:
What Success Looks Like • ‘Couldn’t have done it without the incubator!’
– Oliver Wellington, nRelate Co-Founder• Joined the incubator in 2009• Tech based on related content search • In their 2 years they:
– Built their product – Developed relationships with publishers – Hired key staff– ‘Took advantage of everything NYU-Poly had to offer.’– Acquired by Ask.com (bootstrapped to exit)
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Power of Partnership
The incubators rely a unique, interdependent ecosystem of supportive partners:• NYU-Poly: Top Talent and Applied Science• NYU: Talent, Support and Resources• New York City Economic Development Corp: City Support and
Funding• New York State Energy Research & Development Authority:
Funding• Mentors: Access to Network• NYC Seed: Brand and Counsel• Two Trees Management: Real Estate• Trinity Real Estate: Real Estate
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AREAS FOR IMPROVEMENT
• 67% of respondents said that they would have taken advantage of a co-working ‘Step-Out’ space at the incubator – NYU-Poly is currently working with NYCEDC and members of the real estate community to address this need
• 89% of respondents said they would take advantage of a faculty engineer-in-residence program– This program launched in January 2013 with 8 faculty and there are plans to scale it across NYU
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The Path Forward
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Universities develop new innovations
Startups bring new innovations
to market
Celebrateentrepreneurial
role models
Entrepreneurs give back
to university
Attracts talent & funding to university
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Recent Honors - 2009
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Think Eco Wins Incubator Graduate of the Year
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• NSF program to increase quantity & quality of commercialization efforts
• Part of NYC ‘Node’ with CUNY & Columbia
- 8 week training program 2x/year to NSF-selected team from other schools
- Awarded $1.0m over 3 years
• Curriculum leveraged for other University City & State programs
NYU-Poly incubators awarded NSF-I Corps Regional Innovation Node
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• ~10 week summer program to enable 10 student teams from across NYU to focus on growing their startups. Included:
- Skill-building bootcamp
- Space
- Mentorship’s by NYC VCs & entrepreneurs
- Stipends
Summer 2013 Student Launchpad
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Contact
Micah KotchDirector, Innovation and [email protected]
Media:Kathleen HamiltonMarketing & Communications [email protected]
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