OK, I may be biased having been an early stage VC based out of New York since 1996, but I must say that the vibe, energy, and people at the Techstars NYC Demo Day event yesterday was simply awesome. Dave Tisch and team simply did a fantastic job guiding the startups, recruiting the mentors, and organising the event.
I was quite honored to have been a mentor and to have had a chance to interact with so many high quality teams.The audience was awesome as well bringing together many rock stars of the past with those of the future. In addition, over 750 investors came in from all over including London, California, Boston, and DC to network and participate.
Rather than go in-depth on each Techstar company like Alyson Shontell or Ryan Kim already have, I wanted to highlight some overarching thoughts on the NYC market having been an investor here for over 15 years.
As mentioned above, what I loved most about yesterday was not only catching up with many new friends, but also many old ones who were an integral part of NYC 1.0. Besides talking about the interesting pivots that many of the Techstars companies took during their 3 month program, many of us simply could not resist talking about how the energy was similar to the mid-90s but why this felt different. In fact, I would liken the 90’s Silicon Alley scene as one of discovery but also one where you could argue that the “Emperor had no clothes” meaning that there were lots of great entrepreneurs and startups but no real lasting value created.
Look, New York had to start from scratch but 15 years later what makes this different is that we can see a much better result-the same energy combined with real operating and entrepreneurial chops, real successes and failures, real IPOs and multi-hundred million dollar exits, and a focus on the entrepreneur and product, not on the spreadsheet. So why will this be different this time around:
1. Stronger Ecosystem: accelerators like Techstars, DreamIt, and NYCseedstart have real entrepreneurs and VCs with real experience advising these startups – the pivot and changes from many of these startups from DemoDay was quite impressive and evidence of a stronger ecosystem
2. Real technical experience: what everyone of these startups had in-common was a strong core team of technical founders, rather than business folks outsourcing development. And with that, it was clear to see how much these startups could accomplish with so little capital and just sweat equity. These entrepreneurs understand the concept of lean startup and as opposed to entrepreneurs of the past who hailed from big media/ad agencies/big companies, this new generation of startups starts with the tech guys, the way it should be.
3. Financial support system: now you have Angels and VCs who get it. I remember the number 1 complaint in the mid-90s, New York VCs don’t get it. They are risk-averse and spend too much time on spreadsheets analysing the nth detail on a financial model instead of focusing on the talent and product/market. Fifteen years later, we have many Angels who are former entrepreneurs and many VCs who get it that are in NYC. Add VCs from Boston and CA and elsewhere and you have quite an experienced plethora of investors to work with.
The next inevitable question from this rah rah post will clearly be is this a bubble where yesterday further showed the frothiness of the market? I can’t comment on the public markets but what I can tell you is how these Techstars companies raise capital and at what valuations and timeframe will surely provide us with some leading indicators. Hopefully they all get funded but I also hope that these entrepreneurs maintain their confident yet humble approach to building their business the right way and not get too caught up in chasing the highest valuation they can get.
All in all, what a great day yesterday and I hope to see many more awesome startups build real businesses out of the New York area. Regardless of what happens, we now have a history of failures and successes which means that we all have more experience to help guide us as we continue to move forward to solidifying NYC as a go-to place for startup activity.