Matt Mireles advances the classic arguments for why NYC is not a good place for a startup in his piece for Business Insider — raising money is hard, and talent is scarce — but I’d like to make a couple of points to the contrary:
- VC and Wall Street exist as almost completely different worlds. You can exist within one without ever encountering the other. In Matt’s post it seems as if the two are competing for investments or mindshare. They aren’t. They may be competing for engineers, but that is less and less the case. Thank you financial meltdown!
- I’ve seen a ton of startups doing their seed funding here, as part of Founder Collective and while it’s not uncommon for a gang of NYC-based angels to group together and invest in a company, it’s significantly more common for the angels to be a mix of east and west coast angels. I mean, we all talk to and know each other coast-to-coat — Hunch, New York-based — has significant angel investment from out west. For the time being NYC angel investing is a subset of the larger, Silicon Valley dominated angel investment world.
- Being away from the Valley can be an advantage. A kind of groupthink can start to occur in the Valley if you’re not careful and it’s hard to see outside of it. We started Flickr in Vancouver, BC — not known as a hotspot for world innovation — and yet we were able to attract New York and Silicon Valley angel investors in our very early stages. Raising money is hard *all over*. Doesn’t matter where you are. But if you build something people want, you will find investment.
Matt is right about a lot of things:
- He implies that you shouldn’t hire people out of Wall Street jobs, and I totally agree. Their expectations are mismatched to startup life and all those cushy perks are completely absent. But the positive trend is that those kids just out of school who *would* have gotten sucked into Goldman Sachs are now significantly more likely to go into startups. We’ve gotten a bunch of recent grads at Hunch.
- specialised technical talent *is* harder to find in NYC than in the Valley, though we’ve had a great amount of success recruiting people to come to New York from the Valley, especially at Etsy, which has been growing its engineering group over the past year.
- And Matt is absolutely right that what New York really needs right now is a Billion Dollar Company — an eBay or a Google or a PayPal or a Facebook — and an exit that releases all the people working there from their obligations and frees them to go forth and start new companies. PayPal’s progeny are spectacular — LinkedIn, Yelp, Slide, YouTube — there needs to be something similar in New York.