Matt Puzio ’12Journal #1
My internship unofficially started with a networking introduction event in the Hearst building. The SeedStart Media start-up companies were chosen the previous week and had just moved to New York. It was competitive this year — 250 companies applied for just eight slots. In exchange for a small amount of equity, the companies were given cash, office space, and, most importantly, a huge network of mentors to help them get moving.
The next week my internship officially started. NYC Seed is located in the Varick Street Incubator, which was launched in 2009 by the Polytechnic Institute of New York University (NYU-Poly) and the City of New York. The purpose of the incubator is to provide office space for start-ups based in New York City and get them moving quickly. At any given time there are 20-30 start-ups under the same roof with companies moving in and out on a weekly basis. NYC Seed is one of the permanent residents. NYU-Poly, the New York City Investment Fund (NYCIF), ITAC, and the New York State Foundation for Science, Technology and Innovation (NYSTAR) provide the funding for NYC Seed investments, so NYC Seed is closely involved with advising the Varick Street Incubator start-ups. It is the most dynamic workplace I have ever been in.
I have spent most of my time getting familiar with the eight SeedStart companies. Each company gave their investor pitch to a small panel of venture capitalists. There was a lot of passion and some great ideas, but it was also clear that there is a lot of work needed. Most of the start-ups need a lot of help understanding their market and how investors think about sizing. I spent a few hours with each company talking about these topics and we made a lot of progress. I enjoy working with these companies and I am excited to help them improve their pitches and businesses over the summer.
Journal 2
I was invited to attend my first investor committee meeting a few weeks into the internship. The investor committee is composed of representatives from NYC Seed investors — namely NYCIF, NYU-Poly, and the New York State Energy Research and Development Authority (NYSERDA). Since the fund only has one managing partner, the investment committee reviews most investment opportunities prior to the final decision. The founders that NYC Seed intends to invest in present their pitch and are peppered with questions about their business model, early customers, and hiring plans. In practice, this presentation sometimes happens after NYC Seed has already committed the investments because a founder closes the investment round before the investor committee meeting.
The most interesting part of the investor committee meeting was the discussion about the state of seed-stage venture capital in New York City and where NYC Seed fits into the economic development picture going forward. There were two related trends that were influencing this picture. First, the seed-stage investment space — which was practically non-existent in New York City when NYC Seed started a few years ago — is awash with investments from traditional venture capitalists. Second, the NYC start-up scene has grown significantly, to the point where NYC Seed is sometimes priced out of a round. The discussions centered on how NYC Seed can better execute its mission of economic development given the new venture capital and start-up landscape. No decisions were made, but it will be interesting to see what happens going forward.
We are about halfway through the SeedStart Incubator Program, which just underwent what we have informally dubbed “pivot week.” The eight sets of entrepreneurs have been building out their prototypes night and day while talking about their ideas and businesses to a large network of mentors in the media industry. Through these discussions and early product launches, many of the entrepreneurs came to realize that their original ideas would not pan out as they had hoped. The pivots have ranged from small tweaks to how they charge for their product to completely scrapping the business and starting to brainstorm on new ideas. There have been a lot of ups and downs, but I am sure the businesses will exit the incubator much stronger than when they entered.
Journal 3
A few weeks ago I attended the New York City FinTech Innovation Lab demo day. The NYC FinTech Innovation Lab is sponsored by the New York City Investment Fund (NYCIF) as part of the city’s effort to create jobs through start-ups. Six companies were selected from over a hundred applications. The accepted companies were offered working space, a network of mentors, and a small amount of funding for the twelve-week program. There is a group of venture capital and Wall Street firms that work with the Innovation Lab throughout the summer.
An interesting mix of investors — from seed-stage all the way to investment banking executives — populated demo day at the UBS building in Midtown. The six start-ups were a good sampling of the FinTech space: mobile payments through quick response (QR) codes, information on private companies gleaned from public sources, financial visualization tools inspired by oil and gas breakthroughs, and real-time options data sources. There was a lot of interest from investors and banks following the presentations — I am sure many of the start-ups will be successful due to the FinTech Innovation Lab. The program was very successful and will be even more interesting and competitive in future years.
The SeedStart Incubator Program is coming to an end in a few weeks. As it starts to wind down, the companies are at varying stages of launching their beta products and polishing their investor pitches. One of the biggest challenges was getting the companies to release such early versions of their products. They say if you aren’t embarrassed by your first product release then you waited too long. While it sounds quaint, it is actually true. The most important thing for an early stage start-up is to get a product in the hands of early adopters to see what is right and what is wrong. All of the companies are at or near this point and it is a very exciting time.
My internship has been a great learning experience. I learned the ins and outs of early-stage venture capital, the fundamentals of creating early-stage companies, and how investors play a role in economic development. I am also much more familiar with the NYC start-up environment and I am excited to make a greater contribution after I graduate
