venture ecosystem factbook: new york · workers in the nyc tech ecosystem earned 49% more than the...

2017

Venture EcosystemFactBook:New York

Credits & ContactPitchBook Data, Inc.

JOHN GABBERT Founder, CEO

ADLEY BOWDEN Vice President,

Market Development & Analysis

ContentGARRETT JAMES BLACK Manager, Custom

Research & Publishing

HENRY APFEL Data Analyst

KORY HOANG Data Analyst

DARREN KLEES Data Analyst

JENNIFER SAM Senior Graphic Designer

Contact PitchBook pitchbook.com

RESEARCH

[email protected]

EDITORIAL

[email protected]

SALES

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COPYRIGHT © 2017 by PitchBook Data, Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, and information storage and retrieval systems—without the express written permission of PitchBook Data, Inc. Contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Nothing herein should be construed as any past, current or future recommendation to buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security. This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment.

Introduction 3

New York in the US Venture Ecosystem 4

Economy 5

Investment Activity 6-11

Exits & Fundraising 12-13

League Tables 14

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Contents

2 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: NEW YORK

Is the New York ecosystem finally living up to hype?Introduction

Narratives tend to be hard to control. In the case of the New York venture and

startup ecosystem, most current headlines will posit that “Silicon Alley” has yet

to live up to how much it was hyped around four or five years ago. And yet, just

over a year ago, posts and articles began appearing asking and firmly answering

yes to the question of whether the area’s ecosystem was finally catching up to

the hype.

But actual, data-driven assessment of health matters more than headlines of any

sort. And, as always, candid analysis reveals a decidedly un-dramatic mixture of

yes and no when it comes to whether NY has firmly established its place as the

second-most prominent venture ecosystem in the US. Yes, investment activity in

the NY metropolitan statistical area (MSA)—which includes northern New Jersey,

it should be noted—soared to unprecedented heights in the past few years—yet

it has not escaped the general moderation of the US venture investing cycle.

Yes, NY enjoys unique advantages when it comes to talent given its sheer size,

diversity and cultural appeal—yet it remains pricey and does not yet possess

the sheer concentration of capital across the entire funding lifecycle that Silicon

Valley does...or will it soon? Will Cornell-Technion’s new venture on Roosevelt

Island help augment the engineering talent supply, eventually? There is much

to explore before forming conclusions, and in the following pages we detail

everything from venture financing by size to domestic fundraising in order to do

so.

This is just the latest entry in our series of reports focused on exploring US

venture ecosystems at a more granular level, relying most heavily on PitchBook

datasets but also including relevant figures sourced from outside providers. We

welcome your feedback and questions—reach out to us at

[email protected]. Special thanks to RRE Ventures, Braemar Energy

Ventures, Catalyst Investors and the National Venture Capital Association,

among others, all of whom assisted in the production of this report.

GARRETT JAMES BLACK

Manager, Custom Research & Publishing

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http://pitchbook.com/news/search?media-types=NP&tags=venture-ecosystem

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New York in the US Venture EcosystemSnapshot of the NY MSA’s size within the US venture ecosystem as a whole

In early August 2016 we released the

first US Venture Ecosystem: FactBook,

the largest PitchBook report ever and

a compendium of venture and relevant

economic datasets for the top 12 (by

overall venture activity) metro areas

within the US.

Source: PitchBook. *New York and San Jose technically tied but given San Jose’s exit value and VC invested we gave it second place. Note that PitchBook uses the US

Census Bureau definition and delineation of metropolitan statistical areas.

Note: Using data as of 6/30/2016, this ranking was generated by weighting capital raised, VC invested, VC activity and venture-backed exit value equally, tallying up their ranking in each area, then summing and sorting from lowest to highest, with a lower score indicating a larger ecosystem.

MSA*Size of VC ecosystem,

rankedTotal VC funds raised

since 2006Total VC invested since

2010Total # of VC rounds

since 2010Total exit value since 2010

San Francisco #1 $117.6 billion $101.4 billion 9,710 $90.8 billion

San Jose #2 $35.5 billion $43.3 billion 4,152 $63.5 billion

New York #3* $43.6 billion $33.9 billion 6,174 $17.6 billion

Boston #4 $41.2 billion $30.7 billion 3,664 $28.7 billion

Los Angeles #5 $2.7 billion $21.3 billion 3,403 $11.2 billion

Seattle #6 $7.6 billion $8.4 billion 1,717 $6.7 billion

Chicago #7 $3.4 billion $8.3 billion 1,348 $9.95 billion

Washington, DC #8 $4.8 billion $8.2 billion 1,416 $7.4 billion

San Diego #9 $1.5 billion $9.4 billion 1,317 $8.7 billion

Austin #10 $1.9 billion $6.6 billion 1,376 $3.7 billion

Philadelphia #11 $3.0 billion $4.8 billion 1,003 $5.4 billion

Atlanta #12 $1.15 billion $5.0 billion 837 $7.8 billion

#1

#2

#1

#3

#4

#5

#6

#7

#8

#9

#10

#11

#12

#1 #1

#2

#2 #2#4

#3

#5

#6

#7

#8

#9

#10

#11

#12

#3

#4

#5

#7

#8

#6

#9

#10

#11

#12

#4

#3

#5

#6

#7

#10

#9

#12

#11

#8

Within the US venture industry, Silicon

Valley is so predominant that in

assessing venture ecosystems broken

out by MSA it necessitated splitting

out San Francisco and San Jose. That

said, New York was still second in

terms of total capital raised by VC fund

managers, as well as total volume of

completed venture financings. Third

place for most VC invested since 2010

merely further reflects how the New

York MSA is clearly second in the

nation, after the Bay Area.


Pricey but worth it?New York’s current economic condition & recent trends

When it comes to a metro area as

large and dynamic as New York’s, it’s

difficult to avoid painting with fairly

broad strokes. For the purposes of

this report, the select statistics are

primarily included to provide the

reader with a general grasp of a given

region’s economic backdrop.

The cost of living still precludes some

from considering New York City, while

its allure remains too strong for others

to resist. Data reveals that prices

have indeed remained high, while

rental rates by and large (although

there are plenty of competing reports

that ultimately only go to show how

fickle rental market numbers can be)

are still growing. That said, growth

indicators are also present, with

unemployment declining, earnings

creeping up, and GDP growth steady

even if slower on a per capita basis.

The balanced conclusion from these

disparate trends is one which many

young workers in tech or related fields

have come to over the past few years:

The opportunities available in NYC

are worth spending a lot of money on

rent. For those seeking to be socially

conscious, it is worth noting the overall

national trend of urban metro areas

becoming increasingly pricey for

middle-class and lower inhabitants

definitely holds true in NYC, with a

recent Apartment List report stating

that 54.1% of renters are cost-

burdened.

Interestingly, when it comes to the

closely related indicator of wages,

workers in the NYC tech ecosystem

earned 49% more than the average

New York metropolitan statistical area (MSA)Select

statistics

Labor force (not seasonally adjusted), New York City, July 2017 4.3 million

Portion of residents aged 25 or older holding bachelor’s degree, 2011-2015 35.7%

Population growth, 2010-2016 (est.) 4.4%

Population estimate, July 2016 8.5 million

Total private nonagricultural employment, 12-month % change, August 2017 2.4%

Change in unemployment rates, seasonally adjustedAugust ‘16-August ‘17

-0.5%

Compensation cost change for private industry, 12-month, not seasonally adjusted, June ‘16-June ‘17

3.3%

Consumer price index YoY % change, August ‘16-August ‘17 1.7%

2017 ranking for startup activity 7

2017 ranking for entrepreneurial growth 35

Average hourly earnings of private-sector employees, % change, August ‘16-August ‘17

0.9%

Current-dollar GDP % change, 2015-2016 3.1%

Per capital real GDP, % change, 2015-2016 0.7%

Overall growth ranking among largest 100 US metropolitan areas, 2010-2015

41

S&P Case-Shiller New York Home Price NSA Index, 12-month % change, July 2017

3.88%

Approximate range of change in annual fair market rents, 2-bedroom, FY 2017-FY 2018

9.3%

Sources: US Bureau of Labor Statistics, HUD FY 2017 Fair Market Rents, PayScale, Brookings Institution,

US Bureau of Economic Analysis, The Kauffman Index, New York State Department of Labor, CBRE,

National Apartment Association, Apartment List

*Note: In the preparation of this report, a survey run by RRE Ventures with distribution participation from

Union Square Ventures, Lerer Hippeau Ventures, Workbench and Corigin was consulted.

city-wide hourly wage, according to

a 2013 report per HR&A Advisors. In

addition, jobs within that ecosystem

that didn’t require bachelor’s degrees

paid 45% more than those in other

industries. Although potentially

outdated, those trends are likely to

have held true given the nationwide

competitive market for tech talent,

once again reinforcing the conclusion

that NY may be pricey, but still

worth it. Engineering roles do remain

the most challenging to fill, on an

anecdotal and survey* basis, while

talent remains a considerable barrier

to growth, so such a conclusion is

heartening for NY’s prospects, as is the

continued health of the talent pipeline

from local schools.


https://www.apartmentlist.com/rentonomics/cost-burdened-renters-2016/

https://www.apartmentlist.com/rentonomics/cost-burdened-renters-2016/

http://www.hraadvisors.com/wp-content/uploads/2014/03/NYC_Tech_Ecosystem_032614_WEB.pdf

Quarterly momentum reveals a tempered pace, with late-stage outliers in terms of VC invested

New York MSA venture activity

Source: PitchBook. *As of 9/1/2017

Factors combine to drive down earliest-stage activity

New York MSA venture activity

The cycle moderatesAn overview of New York’s venture investment activity

Early-stage competition takes toll

It is clear the venture investment cycle

in the NY metro area, much like the

US in general, has entered a stage of

moderation after its most significant

ramp-up since the dot-com era. As is

typical of the later stages of price and

sentiment cycles, players in the market

are responding to still-elevated costs

by decreasing activity at the riskiest

or earliest of stages. That isn’t the sole

driver of diminishing angel and seed

activity—increasing sophistication on

the part of founders and investors

alike have resulted in the frequency

of fundings decreasing as they grow

more targeted and data-driven in

general, among others. Meanwhile,

primarily thanks to the preponderance

of capital available to the national

venture industry, the late stage is still

seeing significant funding levels, in

a sign of a healthily correcting, not

crashing, cycle.


2009 2010 2011 2012 2013 2014 2015 2016 2017*

370 498 669 806 965 1,146 1,175 977 619

New York MSA-based companies (#) receiving venture funding


$3.2 $3.9 $3.2 $4.6 $6.8 $8.8 $8.0 $5.3

218322

406 386

539

722

864

1,053

1,250 1,261

1,029

630

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Total Deal Value ($B)

# of Total Deals Closed

Angel & Seed (#)

Early Stage (#)

Late Stage (#)

0

50

100

150

200

250

300

350

400

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

$3,000.0

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q

2010 2011 2012 2013 2014 2015 2016 2017*

Deal Value ($M) # of Deals Closed


Highly active early-stage players

point toward more established

ecosystem down the road

Perhaps one of the clearer signs that

the New York startup ecosystem

has recently begun truly living up to

previously observed hype is the sheer

number of active early-stage investors.

Both 2014 and 2015 recorded close to

or just over 200 active accelerators,

incubators or early-stage venture

funds within the NY MSA. Of course,

such activity is not bound to persist,

as the next few years likely shall result

in a culling of the herd to at least

some degree. But even in the current

environment, wherein so much money

has been flowing to private markets,

capital doesn’t come to a startup

ecosystem without a justifiably fast-

growing base of potential enterprises

being launched, especially in such

numbers. Investors report more

frequent gatherings, tech meetups

and the like than at any other point

in the past five years, as well. Given

the broader context of the overall

investment cycle tempering, the NY

MSA tech scene is more active than in

years past, and simply experiencing

a period wherein once-fledgling

enterprises have now matured and

require nurturing alongside a still-

burgeoning crop of nascent startups

looking to meet higher hurdles.

Significant concentration at the early stage

Investors headquartered in NY MSA (#) by type, active in New York MSA

Source: PitchBook. Data pulled on 10/3/2017

Note: If a firm had >= 70% of investments tagged as early stage, they were classified as an early-stage

firm. Likewise for late stage and growth equity, with the plain VC classifier utilized if a firm’s given

portfolio composition did not reach that threshold of 70%.

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014 2015 2016

Accelerator/Incubator Growth Equity

Early-stage VC Late-stage VC

VC

Steady growth at Series A & C

VC invested ($M) in companies with at least one female

founder in New York MSA

TYPE 2012 2013 2014 2015 2016 2017*

Angel $18.4 $28.3 $21.5 $40.0 $49.5 $12.2

Seed $40.3 $49.6 $81.7 $92.8 $79.0 $38.0

A $94.5 $120.2 $307.1 $255.4 $241.1 $279.5

B $45.3 $111.5 $243.9 $334.0 $318.2 $154.6

C $130.0 $123.4 $138.1 $104.9 $238.7 $304.6

D+ $6.0 $167.3 $143.2 $484.3 $123.0 $74.7

More Series C rounds as of late, steady Series A flow

VC activity (#) in companies with at least one female

founder in New York MSA

TYPE 2012 2013 2014 2015 2016 2017*

Angel 15 23 28 36 29 9

Seed 55 62 87 65 51 19

A 32 36 52 33 30 31

B 6 11 15 23 23 8

C 2 7 5 4 9 9

D+ 1 2 4 6 4 2

Source: PitchBook. *As of 9/21/2017 Source: PitchBook. *As of 9/1/2017

Financing of female-led startups

follows overall cycle

Especially in light of the ongoing

conversation around diversity within

the VC universe, it is important to

consider trends in financing of female-

led companies. Comparisons among

various US MSAs warrant a deeper

dive that will be forthcoming in a

separate post on PitchBook News &

Analysis, but by and large, what is

interesting to note is that after peaks

of early-stage fundings of companies

with at least one female founder from

2013 to 2015, there is a decent increase

in commensurate late-stage a year or

so later, tracing aggregate investment

patterns closely.


Pricing pressures hold steady

Median venture financing size ($M) in New York MSA

Valuations normalize at the latest stage

Median venture pre-valuation ($M), New York MSA

As late stage corrects, overall figures

hold at an elevated level

The distortion of financial flows in

general in an era of unprecedented

monetary policy has also positively

effected changes in the amount of

capital flowing into the US venture

industry. On top of that, as technical

development finally made good on the

starry-eyed promise of the dot-com

era, high-profile early successes both

contributed to a growing population of

angel and venture investors and also

padded their wallets. These factors in

combination have contributed to an

overall elevation of deal metrics within

the national venture industry, and as

one of the most active epicenters of

VC financing within the country, the

NY MSA is little different.

But thus far in 2017, a few things

do stand out. Firstly, at the late

stage, both median round sizes and

valuations have corrected somewhat

in the past 20 months post a 2015

peak. As early-stage figures remain

elevated, the competitive pressures

induced by both the nationwide

surplus of dry powder and growing

sophistication of founders is evident,

especially against a backdrop of

diminishing total financing volume.

The companies that can close a round

in this environment can still close

on plenty of money, in other words.

It is also worth considering that in

relatively pricey areas such as NYC,

historically, financings have trended

higher partially out of pure economic

necessity.

Source: PitchBook. *As of 9/1/2017Source: PitchBook. *As of 9/1/2017

Case study: Tracking the 98 New York MSA-

headquartered companies seeded in 2010 and follow-

on financing rates by company count & financing type

Source: PitchBook. *As of 9/1/2017. In cases where the precise series of the

financing is unknown, the stage is labeled instead.

Follow-on financing type

2011 2012 2013 2014 2015

Angel 1 2

Seed 3 1 2 1

A 24 10 5 1 1

B 2 5 10 6 3

Early stage 1 5 1 2

Late stage 1 3

CVCs stay highly involved

New York VC activity with corporate venture participation


$1.3 $1.5

$6.4$6.7

$12.3

$10.0

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

2010 2011 2012 2013 2014 2015 2016 2017*

Angel/Seed Early-stage VC Late-stage VC

$6.3 $6.7

$22.5 $24.3

$62.2$56.0

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

2010 2011 2012 2013 2014 2015 2016 2017*


$0.5

$1.2

$0.9

$1.7

$2.0

$3.1

$3.1

$2.0

58

8492

133

148

187

162

118

2010 2011 2012 2013 2014 2015 2016 2017*

Deal Value ($B)

# of Deals Closed


Pricing pressures shift proportions upward

New York MSA VC activity (#) by round size

As cycle tempers, later-stage follow-ons are resilient

New York MSA follow-on VC activity (#) by stage

How traditional venture nomenclature

is changing

As the arguably second-largest

venture ecosystem in the US, the NY

MSA is experiencing a significant

redefinition of traditional VC

nomenclature more emphatically than

most. How the inflation of interest and

capital invested in VC has resulted in

seed rounds slowly marching upward

into traditional Series A ranges can

be observed in the breakdown of VC


Traditional nomenclature has changed

New York MSA VC activity (#) by series

Follow-on VC invested suggests shifting dynamics

New York MSA follow-on VC activity ($B) by stage



activity by round size below: A steady

ramp-up in sub-$500,000 financings

by count led to a peak in 2014, yet

the proportion of $500,000-$1

million rounds stayed more resilient in

subsequent years. Moreover, fundings

in the $1 million-$5 million range have

stayed perhaps the most stable of all.

This trend has been partially driven

by sheer availability of capital and the

growing proliferation of incubators,

accelerators, angel syndicates,

and other confluxing models of

entrepreneurship and investment. As

such institutions and organizations

stay active, sophistication and resulting

competition will exert upward pressure

on deal metrics, shifting the common

parlance of series and associated

round sizes. In a related phenomenon,

NY’s success in attracting follow-on

capital speaks to its evolution into an

even more mature venture ecosystem.

0

200

400

600

800

1,000

1,200

2010 2011 2012 2013 2014 2015 2016 2017*

Under $500K $500K-$1M $1M-$5M

$5M-$10M

$10M-$25M

$25M+

0

100

200

300

400

500

600

700

800

900

2010 2011 2012 2013 2014 2015 2016 2017*


$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

2010 2011 2012 2013 2014 2015 2016 2017*

Angel/Seed Early VC Later VC

0

100

200

300

400

500

600

700

800

900

2010 2011 2012 2013 2014 2015 2016 2017*

Seed Series A Series B Series C Series D+


Traditional strongholds in the area stay popular

New York MSA VC activity (#) by sector

Software’s proportion holds steady

New York MSA VC activity ($) by sector


Off-pace volume, as first-time VC invested stays strong

First-time financings in New York MSA

The city environs host the most activity, still

City of New York-only venture activity



Investors remain selective as NYC

benefits from concentration of

industries

As a stronghold of multiple industries

and global center of a few, the NY

metro area benefits immensely from

a proliferation of big customers,

senior executives crossing over into

entrepreneurship, information flows

and potential for collaboration, all

key to a well-functioning startup

ecosystem. Particularly given the

moderation of the investment cycle,

such cross-collaboration proves

crucial in underpinning the supply of

enterprises suitable for VC infusion.

Anecdotally, such crossover has

become more common, likely as

the boundary between certain tech

segments and more traditional NY

industries such as finance become

blurred in fintech, among other areas.

The dynamism and sheer size of the

NY metro area in terms of population

still bode well for its ability to host a

diverse variety of startups by sector.

It is worth noting that media’s heyday

in terms of its proportion of venture

activity and dollars appears over,

but that is more due to that sector

being already completely disrupted

over the past decade than anything

else, especially as monolithic social

networks continue to encroach into

the business of news.

$452

.1

$702

.8

$558

.8

$1,0

15.7

$986

.8

$854

.9

$802

.3

$497

.1

243

332

412

447

514

420

310

186

2010 2011 2012 2013 2014 2015 2016 2017*

Deal Value ($M) # of Deals Closed

$2.5

$3.0

$2.5

$4.0

$5.5

$7.5

$7.1

$4.9

414

591

743

893

1,102 1,077

883

525

2010 2011 2012 2013 2014 2015 2016 2017*

Deal Value ($B)

# of Deals Closed

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100% So�ware

Pharma & Biotech

Other

Media

IT Hardware

HC Services & Systems

HC Devices & Supplies

Energy

Consumer Goods &Recrea�onCommercial Services

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100% So�ware

Pharma & Biotech

Other

Media

IT Hardware

HC Services & Systems

HC Devices & Supplies

Energy

Consumer Goods &Recrea�onCommercial Services


Investment (#) by size in New York MSA-based companies

by investors HQ’d outside New York state only

Investment in New York MSA-based companies by investors HQ’d

outside New York state only

Outside investment has steadied, with

investors increasingly looking locally

Most venture ecosystems in the US

simply don’t have a fully self-sustaining

supply of domestic sources when it

comes to growth-stage capital. This

isn’t necessarily a negative, simply

an observation that early-stage firms

usually must possess connections to

enable follow-on fundings in order to

scale significantly. What’s interesting

about NY, as the second-most active

area in the US, is that the anecdotal

verdict regarding the availability

of midstage capital is quite mixed.

Most firms prefer to source funding

locally, according to a survey sourced

from various investment firms, while

obtaining capital remains the biggest

barrier to growth. Yet as datasets

below reveal, the preponderance of

outside investor participation is within

rounds in the middle of the size range,

while overall investment from outside

investors by count peaked in 2015.

In the context of a moderating

investment cycle, such trends yield

the conclusion that the NY venture

ecosystem is growing somewhat more

self-sustaining in terms of nascent and

early-stage funding. Silicon Valley-

based and other firms of sufficient size

still do play an important role when it

comes to participating in investments

intended to help companies scale at a

significant rate, however.


$639

$609

$1,0

60

$951

$1,4

78

$1,2

19

$949

$838

178 187

223

279

252

320

230190

2010 2011 2012 2013 2014 2015 2016 2017*

Deal Value ($M)

# of Deals Closed

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016 2017*

$25M+

$10M-$25M

$5M-$10M

$1M-$5M

$500K-$1M

Under $500K

Investment ($) by size in New York MSA-based companies

by investors HQ’d outside New York state only

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016 2017*

$25M+

$10M-$25M

$5M-$10M

$1M-$5M

$500K-$1M

Under $500K


Healthier than headlines suggestDatasets of venture-backed exits and local venture fundraising in NY

Volume finally takes a downturn

Venture-backed exits of New York MSA-based companies

Venture-backed exits ($B) by type of New York MSA-

based companies

Venture-backed exits (#) by type of New York MSA-

based companies

A healthy if not spectacular recycling

rate

One of the commonest complaints

regarding the NY venture ecosystem is

the dearth of $1 billion+ exits. Granted,

outlier exits do play a role in narrative

formation around a given venture

scene, as well as in positive effects of

recycling capital and entrepreneurial

talent. That said, as is clear from the

aggregate post-exit value created by

VC-backed companies over the past

few years, as well as the sheer volume

of exit events, the NY MSA is posting

healthy tallies, even in the absence of

a WhatsApp or Snap. An article from

Correlation Ventures in May posited

that the East Coast was actually on par

with the West Coast when it came to

realized returns due to greater capital

efficiency. And, indeed, as PitchBook

calculations of multiples on invested

capital reveal, the NY MSA does have

a greater proportion of significantly

sized exits than may at first be

suspected.

Source: PitchBook. *As of 9/1/2017. Note: Aggregate exit post-valuations are included to better

represent the total value created by IPOs in particular. They include IPO post-valuations, which are

calculated as total shares outstanding multiplied by offering share price.


$2.5

$2.0

$3.4

$4.1

$5.0

$5.5

$6.5

$4.4

52 54

95

110

99 103 103

57

2010 2011 2012 2013 2014 2015 2016 2017*

Aggregate Exit Postvalua�on ($B) # of Exits Closed

0

20

40

60

80

100

120

2010 2011 2012 2013 2014 2015 2016 2017*

Acquisi�on Buyout IPO

$0

$1

$2

$3

$4

$5

$6

$7

2010 2011 2012 2013 2014 2015 2016 2017*

Acquisi�on Buyout IPO


https://medium.com/correlation-ventures/which-vc-returns-were-higher-over-the-last-decade-east-coast-or-west-coast-e1d86eaccbd7

https://medium.com/correlation-ventures/which-vc-returns-were-higher-over-the-last-decade-east-coast-or-west-coast-e1d86eaccbd7

Exits have tended toward the larger as of late

Venture-backed exits of New York MSA-based

companies ($) by size

Fewer but larger exits by size in 2017 to date

Venture-backed exits of New York MSA-based

companies (#) by size

Fundraising still overall healthy

New York MSA venture fundraising

All that acknowledged, it is undeniable

that the impact of a multibillion-dollar

acquisition or IPO is hugely important

to a VC ecosystem, and the continued

lack thereof in NY may not hinder

as much as headlines would have it,

but certainly won’t help. In his book

Startup Communities, Brad Feld

employs a timeline of approximately

20 years for a venture ecosystem to

truly rev up—NYC is only just nearing

that timeframe, as opposed to Silicon

Valley’s multiple decades.

Fundraising bodes well

In one of the most encouraging signs

for a venture ecosystem, NY is still

enjoying the impact of recent strong

fundraising totals. Given typical fund

lifecycles, the impact of the 111 vehicles

closed from 2014 to 2016 will continue

to be considerable for years to come

across the capital stack, given the total

sum of commitments raised as well.

2017 is currently seeing diminished

volume but, in light of more recent

yearly tallies, that is more attributable

to most domestic venture firms that

were positioned to raise another fund

having already done so.



Under 1x

1-2x 2-3x 3-5x 5-10x 10-15x 15-20x 20-25x 25-30x 30x+

20.5% 11.4% 8.7% 16.0% 24.2% 8.2% 2.7% 1.8% 0.9% 4.1%

A significant portion of volume in the midrange

Percentage of New York exits separated by multiple on invested

capital (MOIC), 2006-2017*

Source: PitchBook. *As of 9/1/2017. This table recreated and updated the same

methodology as used in this article, excepting the inclusion of buyouts in this dataset.

https://pitchbook.com/news/articles/which-us-cities-generate-the-best-vc-returns

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016 2017*

Under $25M $25M-$50M $50M-$100M $100M-$500M

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016 2017*

Under $25M $25M-$50M $50M-$100M $100M-$500M

$3.2

$5.0

$1.2

$0.8 $2

.3

$4.6

$4.4

$1.6

$7.4

$5.8

$2.9

$1.7

17

24

10

13

21

20

28

20

42

28

41

23

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Capital Raised ($B)

# of Funds Closed


https://pitchbook.com/news/articles/which-us-cites-generate-the-best-vc-returns

Lerer Hippeau Ventures 16

Greycroft Partners 14

Social Starts 11

Y Combinator 10

Female Founders Fund 10

General Catalyst Partners 10

Collaborative Fund 9

Thrive Capital 8

SV Angel 8

Kleiner Perkins Caufield & Byers

8

New Enterprise Associates 8

Most active investors in NY MSA,

2017*, across all stages

Venture capitalVenture capital, for the purposes of this report, is defined as institutional investors that have raised a fund structured as a limited

partnership from a group of accredited investors, or a corporate entity making venture capital investments.

ValuationsPre-money valuation: the valuation of a company prior to the round of investment. Post-money valuation: the valuation of a company

following an investment.

Exits

This report includes both full and partial exits via mergers and acquisitions, private equity buyouts and IPOs.

FundraisingThis report includes New York MSA-based venture capital funds that have held a final close. Funds-of-funds and secondary funds are

not included.

League tables are compiled using the number of completed VC rounds for New York MSA-based companies. To ensure your firm is accurately represented in future PitchBook reports, please contact [email protected].

CompanyDeal size

($M)Series/stage Sector

Peloton $325.0 Series E Consumer Durables

Casper Sleep $170.0 Series C Consumer Durables

Dataminr $130.0 Series D Software

Bread Operations $126.0 Series B Software

Blink Health $90.0 Series B Software

Progyny $83.1 Series B Commercial Services

Vroom $82.2 Series F Retail

Freshly $77.0 Series C Consumer Non-Durables

Kobalt Music $75.0 Series D Media

PMV Pharmaceuticals $73.7 Series BPharmaceuticals and

Biotechnology

Betterment $70.0 Series E Software

ClassPass $70.0 Series C Software

Select League TablesSelect rankings of most active investors and deals in NY

Select 2017* venture financings of companies headquartered in NY

Most recent round type

9-12 months

12-18 months

18-24 months

Angel/seed 39 73 36

A 18 36 33

B 7 20 10

C 87 181 216

Ready for the next round: companies

(#) by time since most recent round





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