(2009-02-19) Nyc Economic Stimulus Plan

Mike Bloomberg announced a New York City-specific Economic Stimulus plan. Some of it seems wasted on the Investment Bank area, but others are specifically targeted at Entrepreneur-s. (Nyc Challenges)

More discussion of the Start Up side of it. It turns out, the city may be using the word "IncubatOr" a bit liberally. According to its outline of the incubator, "university partners" will be made available to provide mentoring services, business seminars and networking opportunities for tenants... But there are no plans to provide hands-on advisory services... New York is not exactly lacking in the start-up department. The city, which is the fourth-largest U.S. region in terms of venture capital investment, has been one of the few regional bright spots for start-up companies... Like Levy, Jay Goldberg, a partner at HudsonVentures, another SBIC-sponsored fund, at first glance believes that the government's money could be better served by providing tax credits that encourage existing start-ups to create jobs for those affected on Wall Street... But David Rose believes the city's proposed (Angel Capital) fund is a bit ambitious in scope, aiming to benefit about 250 companies over eight years. Managing that many companies would prove to be very difficult. Rose said NewYorkAngels invested $5 million last year, which amounted to a few hundred thousand dollars for a handful of companies. He said the city will have to find a fund manager willing to invest in companies that require far less capital, which could be a challenge.

Charlie O Donnell on the total lack of Engagement from the City folks to the local tech community. The other day, I got an invite to a closed door meeting about building a centralized web presence to support entrepreneurship in NYC. The invitation reminded me that I was not to discuss the contents of the meeting elsewhere--which, as a blogger, just makes me think of the word "muzzle"... Every time I ever meet with city representatives, EDC folks, testify in front of the city counsel, etc... I invite the folks I meet to join the NextNY listserv, come to our events, or to a Ny Tech Meetup--to participate in the very community you say you are trying to support. To my knowledge, no one has ever accepted the invitation.

Zed Shaw thinks this is too tiny, esp on a per-Start Up basis. Honestly though, if this NYCSeed has 2 million to fund, what they should do is dual fund a CoWorking space and give 20k to each startup to start them off... There are several reasons why technology just doesn't take off here the way it does in Silicon Valley. The primary reason in my mind is that California has laws that protect employees from their employers stealing off-hours work. In California, tech workers have no problem working on the next hot start-up in their spare time because they know Megalo Corp won't own it when they're done. I believe California is the only state in the US that has this law, and wow look, it's the only state with a rampant churn of startups and innovation that now rivals the banking industry in capital. However, at a more micro level, what screws up technology startups in the city are the high costs of doing business here, combined with the dominance of banking sucking away all the talent and money.... I've been thinking of moving to Silicon Valley just to have a few years of the experience. After reading articles like this for years about how little money technology gets compared with banking in NYC, and after seeing how much fun people on the other side of the country have, it's very tempting. Of course, then I'd have to put up with California and it's nasty car fetish, horrible prison system, crime, actors, crap music scene, cilantro, avocados, and Passive Aggressive nit wits.

Mar05 update: Paul Graham on how little it would take for a city to "buy" a Silicon Valley-like position. A city could select startups by piggybacking on the expertise of investors who weren't local. It would be pretty straightforward to make a list of the most eminent Silicon Valley angels and from that to generate a list of all the startups they'd invested in. If a city offered these companies a million dollars each to move, a lot of the earlier stage ones would probably take it... It would be a pretty cheap Experiment, as civil expenditures go. Pick 30 startups that eminent angels have recently invested in, give them each a million dollars if they'll relocate to your city, and see what happens after a year. If they seem to be thriving, you can try importing startups on a larger scale. (Hmm, "thriving" seems pretty subjective, given who would be evaluating...) Interestingly, the 30-startup experiment could be done by any sufficiently rich private citizen.