You don’t have to fly to California anymore to find a hot startup culture… there’s one right here in New York.
In the wake of the dot com implosion of the late 1990s, New York has grown into a complete tech startup ecosystem, with advertising, media, software and venture capital resources, according to the Wall Street Journal.
The city is starting to spawn second-generation startups. For example, Google’s acquisition of New York-based advertising company DoubleClick in 2007 made millions for co-founders who have turned around and founded or funded new companies. For example co-founder Kevin Ryan sank capital into job search site TheLadders.com and members only shopping site the Gilt Groupe.
New York startups tend to run on tighter, more efficient budgets. Even though the cost of living in New York is one of the highest in the world, startup costs for businesses are actually relatively low compared to other cities.
According to a study released in June, public financing options and the availability of free office space make New York a pretty cheap place to run a business when compared to Silicon Valley.
New York City is also overflowing with startup capital, according to a recent report from the Business Insider. (Sidenote: Kevin Ryan is a principal investor in BI’s parent company)
Not only is there tech venture capital from groups such as Union Square Ventures, but a lot of hedge fund people disillusioned with the financial markets by the recent recession are looking for new ways to invest their money. For guys used to billions, seed capital for a startup (usually $1 million or less) is chump change.
The problem for a startup in New York may actually be too much capital. Overvaluation by an investor unfamiliar with tech startups might actually make it tougher to get a second round of funding.