LI seen lagging in venture capital deals
At a recent meeting with Newsday business editors and reporters at the paper's offices in Melville, Long Island venture capitalist Mark Fasciano was asked whether the region is even on the radar screens of VC firms across the country.
"Nope," said Fasciano. "Not yet."
The candid comment by Fasciano, founder of the Jericho-based VC firm Canrock Ventures, is supported by a report issued in early May from a Manhattan-based policy organization, the Center for an Urban Future. The report said Manhattan, in particular, is going gangbusters when it comes to attracting venture capital and new Internet start-ups.
According to the report, 486 digital start-ups have been formed in New York City since 2007 that have received funding from venture capitalists or other outsiders. The number of VC deals overall rose by 32 percent in the city during the same period, the report said. In Silicon Valley the number of such deals actually declined over that time.
"So many of the trends in technology today really play to New York City's strength," said center director Jonathan Bowles. "It used to be about actually building technologies, but today so many [tech] companies are applying technology to traditional industries like fashion, advertising and finance," all areas where New York City is strong.
So where is Long Island in all of this?
Last year, the Long Island Association started a program, Accelerate Long Island, to take research from the Island's labs and universities and encourage entrepreneurs to develop it into businesses. Additionally, the new Long Island Angel Network introduces start-up companies to investors. Fasciano and the LIA and others are trying to develop a business incubator called Thought Box in Hicksville, where mostly young tech executives could work and congregate to share ideas.
Still, Michael Faltischek, board chairman of the Angel Network, said the Island is "at the entry level" when it comes to attracting venture capital and Internet companies. "We've been playing catch-up for five years," Faltischek said.
VC deals have been few on the Island, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association. There were only two reported in this year's first quarter, worth $2.2 million, compared with 75 in the city, worth $378 million.
But Long Island "can make gains," said Bowles, by developing concepts like the Thought Box. LIA president Kevin Law said he is encouraged.
"The better New York City does means that there will be more people looking for opportunities out here," Law said.