Congrats on the launch of the blog, looking forward to following and interacting.

I agree that we are seeing more early stage money in NYC lately. I disagree about the lack in the past. There have been plenty of early stage investors in NYC over the past few years. We haven’t had a lack of capital. Great teams and ideas will always find money. The marginal ones won’t.

What we need in NYC now is more great early stage companies to support this money. If we dont have this we will see a few things happen

1) We will see over inflation of valuations if there is too much money chasing to few deals
2) The investors will start to invest in more companies outside of NYC
3) More marginal companies will get funded that would not have been funded in the past, this isn’t always a good thing.

Hopefully the coming out party for NYC venture capital that is happening now will attract great entrepreneurs to NYC, if it doesnt we a going to have an issue.

[reposting a comment for your blog too]

Charlie and I have been discussing this for quite some time – check out his post and my post on the topic.

I, for one, am thrilled to see the impact of the meltdown of CorporateLand and the financial bubble in freeing up money. One of my relatives was telling me that there is over 5 TRILLION sitting on the sidelines. It is now almost 18 months since the meltdown. This means that investors are ITCHING to get their money working again.

My concern: no one is bringing the infrastructure (incubators), the education (training people how to become facile with tech) or experience (previous success players) in a way that creates a positive spin.

I am sorry, but the schools in NYC while excellent in many areas, have not fostered entrepreneurial thinking – they are often fostering COG thinking (where can I get a job to settle down). As Columbia ramps up its program, and Poly/NYU begins to ramp their program – give it five years – THEN I will be very proud of the schools.

I am excited about the fact that entrepreneurs with experience are making NYC their home (Stowe, Caterina, Matt, JackD, etc) and that many of our homegrown are staying with us here. That is VERY important.

Now, if we could convince Mayor Bloomberg to figure a way to really incentivize people to build businesses here – like finding a way to bring down the base cost of running a business in the City. Come on, NYC has one the HIGHEST tax base for businesses in the nation (IMHO).

Mayor Bloomberg – are you listening?

I think it is hard to distill the reasons why the NY startup scene is blowing up down to one factor. Is it the investors? Is it the entrepreneurs? Is it the financial meltdown? Ultimately, all these reasons strike me as post hoc ergo propter hoc fallacies — that is, just because we’re seeing a lot of new bright investors in NYC doesn’t mean it is the reason why there’s more interest in the startup scene. X could cause Y, Y could cause X, or both X and Y could be caused by some other factor Z.

If I had to pick one factor, I’d probably say that there are simply enough people now doing early-stage stuff in NYC that the social network density has reached a tipping point of sorts. NYC is extremely siloed — finance guys don’t talk to ad guys, media guys don’t talk to gaming guys, etc. It requires a lot of well-networked people in the startup space to overcome that.

Ultimately, I think it is more about the social graph than the money. The money was always here and always will be.

http://8tracks.com/about
http://www.baychi.org/calendar/20060411/

I’ve been following the debate as I moved from SF to NYC in 2007 in part for personal reasons (love the city) but also b/c it felt like the factors for success in my planned startup were less about technology and more about culture, design and finding the right early adopters (e.g. the folks who wore Hush Puppies in ‘94, in Gladwellian speak).

While I still spend quite a bit of time in SF, I think NYC is the right fit for us given the nature of our service, our core users & our team (http://8tracks.com/about).

(Btw I believe we met briefly via Adrian Chan at this event a few years back: http://www.baychi.org/calendar/20060411/.)