Seems to be an unending supply of first-time nyc entrepreneurs. Some are building products, some are building businesses. All are getting awesome experience under their belts that, due to recent market, economic, and technical infrastructure conditions have encouraged people to start something baller. But to build a prosperous and long-term startup-ecosystem we all know we need 2-3 big companies to exit and for their key talent to do it all over again. But where does that initial talent come from? History indicates that they come from BOTH failed startups and successful ones. Case in point- almost every rockstar entrepreneur out there, failed significantly in at least one of their first few ventures.
So, back to the title. The immediate impact of the down market is that some angel investors are now unable to invest at the rate/level they would like to. Oh noes. More for me. Seriously though, I would argue this is not a major detriment to the ecosystem. Here’s why:
+Cheaper to do a lot with less money
+Many investors have moved earlier stage
+Super Angels/MicroVCs emerged to fill-in the seed investing gap
Sure there is less venture money and firms and more entrepreneurs than there were 5 years ago, but that is in aggregate. In early stage, NYC has seen a dramatic increase in early stage dollar and number of investments on a per entrepreneur basis (note: this includes unfunded entrepreneurs!)
For the most part, the investors unable to invest due to current market conditions are likely unsophisticated investors that don’t know the difference between a convertible w/ a cap and the new roadster drop top they can no longer afford.
Don’t take their money. You don’t need it. You’ve really learned a ton during your recent entrepreneurial endeavor and there is smart money to be had. If this is longer term down-turn, then there is NO BETTER TIME to launch a startup. Google it. Cliffnotes: talent is cheaper/available, customers are willing to explore cheaper options, incumbents are hampered with paying for 25000 mouths to feed while you are still barely (not) feeding 5. Lastly, if your venture has run it’s course you can still be a part of this ecosystem in a larger and more successful startup. You can be a part of the management team that seeds hundreds of new startups! Every one of these options is awesome and I can’t wait to see which one you take.