How often do NYC tech startups survive for the long haul?
Mayor Michael Bloomberg announced yesterday that Cornell University and Technion–Israel Institute of Technology have won the city’s competition to build a new applied sciences school, which will be located on Roosevelt Island. The Mayor shared the stage at the press conference with David Karp, CEO of the New York City–based startup Tumblr, and declared, “By adding a new state-of-the-art institution to our landscape, we will educate tomorrow’s entrepreneurs and create the jobs of the future.” City officials point to Technion’s success in spawning thousands of new technology start-ups in Israel. But even if engineers from Cornell’s future campus create more tech start-ups for New York, not every fledgling company will turn into a viable enterprise.
We want to know: What share of New York City’s tech startups have turned into successful businesses?
If you have information that can help shed light on the question, please post it in the comments or drop us a note.
What we heard
Currently, the NY Tech Meetup lists 229 companies as “Made in New York City,” meaning that the tech ventures are mostly coded in the city and have traffic of at least 10,000 users a month. They range from tiny shops like the eight-person want! to giant employers like Bloomberg LP.
But no one actually tracks the rise and fall of tech startups in New York City or how many people they employ. Anand Sanwal, CEO of CB Insights, a company that collects information on startup venture capital investments, said that the nature of the industry makes it difficult to quantify who is and isn’t successful.
Thanks to the low costs of starting an online company, a tech startup can be two engineers working part-time from home. Other startups might have a half dozen employees, office space and enough capital to pay their employees. CB Insights starts tracking startups after they receive funding, but even that can be imprecise. “When someone gets funding there’s a lot of fanfare,” said Sanwal. “But when someone disappears there’s not.”
The bottom line, it seems, is that a success/failure rate for startups might not be worth much even if it was available. Instead it might be worth looking at these three other numbers to get a better picture of how well the city’s tech sector is doing:
• The number of patents issued to New York City applicants has increased from 1,760 in 2000 to 2,716 in 2010, according to the city’s Economic Development Corporation. EDC also reported that high-tech employment increased 30.3 percent during that period, from 69,620 to 90,723.
• According to The National Venture Capital Association investment in the New York metro area reached $2.2 billion in 2011, its highest level since 2002. This fall New York surpassed Massachusetts for the first time in the number of venture capital deals.