Entrepreneurship in New York: The Mismatch between Venture Capital and Academic R&D

I received this report yesterday: Entrepreneurship in New York ebook.  It is worth reviewing if you are interested in entrepreneurship and VC in upstate NY.  Good perspective though I am favorably biased towards activity that I see “up here”.  Our deal flow is strong and constantly growing.  It is actually better than ever.

I am including below the entire introductory email that came with the report.   Enjoy the long weekend.


Hello Friends and Colleagues,

We are pleased to pass along to you our recent paper “Entrepreneurship in New York: The Mismatch between Venture Capital and Academic R&D”.  The study was a collaborative effort between the SUNY Levin Institute, where it was initiated, the Research Foundation for SUNY, and SUNY Geneseo.

This study, which updates reports published by Excell Partners in 2009, confirmed that New York State continues to be exceptionally strong in academic R&D and innovation.  Academic R&D expenditures are now close to $6B annually.  NYS ranks #2 in the nation, second only to California for academic R&D, and this research is split almost evenly between upstate and downstate universities.  89% of this academic R&D is in the life and physical sciences. Relative to venture capital, the good news is that the state’s share of venture investment nationally rose from 4 percent ($1.2B of $29.9B) in 2007 to 7 percent ($1.8B of $26.5B) in 2012.  This rapid growth is almost entirely due to the ramp-up of company formation and investment in New York City.  In fact, 97% of this capital was committed downstate.  However, it was heavily focused on what we call “soft tech”. In 2012, 85% of the venture capital invested in NYS went to start-ups in information technology and the creative and commercial service industries.  Only 15% was invested in life and physical science companies and investments in the hard sciences are showing a decreasing trend.

As we continue to develop entrepreneurial ecosystems to build a stronger innovation-based economy in regions around the state, the extreme dichotomy of interests between NY’s strong R&D base and its rapidly expanding but localized venture investment pools is important to understand.  Identifying new sources of investment for hard science-based companies will be crucial for our success.  And new opportunities may emerge to utilize the significant investment pools focused on internet-enabled business to support new enterprises upstate.

We hope you will enjoy reading our report and reflecting on its findings, interesting opportunities, and challenges.  We look forward to the opportunity of holding some regional focus groups throughout the state during the summer to share what we have learned, hear your perspectives, and go from there.

The ebook is published by Open SUNY textbooks and can be downloaded at: http://opensuny.org/omp/index.php/minerva/catalog/book/171 or  http://go.geneseo.edu/Entrepreneurship.  Print copies of the ebook are available through Amazon at: http://amzn.com/0989722635.

With our best wishes,

Judy Albers and Tom Moebus