Powering New York’s Startup
Ecosystem:
An Economic Impact Analysis of
NYU-Poly’s Incubator Initiatives
“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 Incubators
Changing The Landscape of a City for the Better
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Creating Successful Businesses
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Creating Jobs
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Revitalizing the Local Real Estate Market
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Supporting Entrepreneurship
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Generating Wealth
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The Model
Tackling Common Friction
Points:
Helping Startups Achieve
‘Escape Velocity’ through:
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Lack of Funding
Lack of Affordable Space
Hard to Find Engineering Talent
Inadequate Information
Infrastructure
Capital
Customers
Expertise
Service
Multiplied by Community
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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
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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
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Companies acquired
$ 60M
Raised by incubator companies to date
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Some Additional Facts
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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
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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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Advisors
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
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Economic Impact Analysis: Methodology
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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
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Incubators are drivers of significant economic activity
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Foster production of ground breaking technologies in diverse industry
sectors
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Benefit businesses through public/private participation and academic
resources
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Strengthen NYU-Poly academically
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Create Good Jobs
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Attract Significant Capital
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Economic Impact
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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
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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
2009-2012
$251.2M
900
End of 2013
$352.4M
End of 2014
End of 2015
Direct Jobs
Indirect Jobs
Induced Jobs
562
221
117
1270
808
285
175
$500.1M
1800
1150
400
250
$719.8M
2580
1650
570
350
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Projected Economic Impact:
Multipliers Applied
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All data is cumulative and based on extrapolation of survey data to
produce employment estimates encompassing all incubator companies
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Indirect and total job estimates and economic impact based on IMPLAN
multipliers
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Strong Job Creation
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As of December 2012, NYU-Poly Incubators have created 900 jobs
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By 2015, NYU-Poly Incubators will have created nearly 2,600 jobs
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The average graduate of NYU Poly incubator earns $72,230 a year
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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
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
Tax figures include personal
(payroll, income, etc.) and
business taxes
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Capital Raised
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The average funding growth rate for current tenants is 147%
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There is no shortage of capital once startups leave the incubators
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More than $60 million in private funds has been raised by incubator
companies to date
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Capital Raised
Average 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
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100% of companies surveyed stated that their firm is headquartered in
the NY/NJ region
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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
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New York ranks 2nd in total startup activity
and 3rd in venture funding
1 - San Francisco
Total Startups: 3,442; Apple,
Facebook, Google, Twitter
$11.8 billion invested in 430 companies
2 - New York
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1
2
5
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Total Startups: 1,844; Foursquare,
Tumblr, Fab.com
$2.7 billion invested in 332 companies
3 - Los Angeles
Total Startups: 1,507; Break Media,
Demand Media, Viddy Citysearch
$2.0 billion invested in 129 companies
4 - Boston
Total Startups: 700; TripAdvisor,
Kayak.com, Carbonite
$2.8 billion invested in 285 companies
5 - Washington DC
Total Startups: 261; LivingSocial
$979 million invested in 146 companies
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The University Connection
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Allows faculty to work alongside
engineers to bring their work to
market
• 250 Student Positions Created
• 8 Faculty Engineers in Residence
Brings high-quality work experiences • 12 Faculty Consulting Projects
to student interns
• 12 Links to Departments,
Programs, Center and Labs
Provides human capital that tech
companies NEED that cannot be
found elsewhere
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The Case for University-tied Incubators
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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
Grad students
intern for
incubator teams
Startups get real
value, build
talent
Inspired
students
emerge with
real experience
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University Progress and Momentum
RECORD
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ARSF
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RECORD
IN 2012 NYU
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ENTREPRENEURS
STARTUPS FORMED
AWARDS
CHALLENGE
BASED ON NYU IP
INVENTION
DISCLOSURES
ONE
INCREASE
BILLION
37%
NYU SCHOOLS
LICENSING
INCOME
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NEW STUDENT
ENTREPRENEURSHIP
CLUBS FORMED
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Good Exits
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Five Acquisitions (including 3 NYU affiliated companies) totaling over $50
million dollars
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nRelate:
What Success Looks Like
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‘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
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67% of respondents said that they would have taken advantage of a coworking ‘Step-Out’ space at the incubator
– NYU-Poly is currently working with NYCEDC and members of the real
estate community to address this need
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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
Universities
develop new
innovations
Attracts talent &
funding to
university
Entrepreneurs
give back
to university
Startups bring
new innovations
to market
Celebrate
entrepreneurial
role models
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Recent Honors - 2009
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Think Eco Wins Incubator Graduate of the Year
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NYU-Poly incubators awarded NSF-I Corps
Regional Innovation Node
• 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
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Summer 2013 Student Launchpad
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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
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Contact
Micah Kotch
Director, Innovation and Entrepreneurship
mkotch@poly.edu
Media:
Kathleen Hamilton
Marketing & Communications Director
hamilton@poly.edu
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