-by Brad Svrluga, General Partner at Primary Venture Partners
We here at Primary are hugely bullish on NYC Tech, as you no doubt know. We have witnessed an exhilarating and inspiring change over the last 8-9 years as the financial crisis dramatically transformed the topography of our labor market for information workers in NYC, and the startup and tech communities have been the primary beneficiaries.
As my partner Ben likes to describe it, in 2007 young investment bankers would walk around with their chests puffed out, proudly declaring that they work at Goldman Sachs. Today, many of those comparable employees are more likely to answer, when asked pointedly what they do for a living, “cough - goldman sachs - cough.” Who would’ve thought we’d ever hear Columbia Business School Dean Glenn Hubbard saying, as he recently did to his entering class, that last year more CBS grads went to work at Google than at Morgan Stanley? Bottom line, tech in NYC has swagger, the cool kids are flocking to it, and the results have become very real.
We’ve been confident enough in the growth of New York’s tech community to literally bet the strategy of our firm - and our forthcoming Fund II - on it. But we have had a growing dissatisfaction with the lack of a high-quality, tentpole event that properly casts a spotlight on all the amazing things going on here. Sure, we have TechCrunch Disrupt, which is great. But that has become so noisy, and is something that top investors and operators rarely attend anymore. And we have our accelerator demo days… also a key piece of the equation, but similarly lacking that high-profile, curated crowd. The “right” event has been missing, so we decided to make it happen.
From the outset, we wanted this event to attract the very best investors in the country to NYC. We wanted to create a sense of the magnitude and diversity of opportunities here, and to show top-notch outside investors that the depth of this community is second to absolutely nothing outside of Silicon Valley. And we wanted to show them that this market is something they have to stay on top of, lest their competitors walk off with the best deals.
Last week, these ideas became reality as we hosted the inaugural Primary NYC Summit. This two-day event attracted over 100 partner-level investors from nearly every leading venture firm in the nation. Names like Accel, Bain Capital, Battery, Bessemer…. and those are just the As and B’s! We fed these eager investors a steady diet of NYC’s best and brightest early-stage companies. The whole event was a testament to the growth of NYC Tech, and the widespread attention we’re getting from the broader investment community.
We structured the event over two days - one each focused on consumer and B2B businesses. Twenty companies presented each day, and we mixed into the agenda a collection of panel discussions, each featuring an array of out-of-town VCs anchored by a local VC moderator. Topics included the current fundraising market and investing trends in the SaaS and consumer sectors. You can get a full sense of the proceedings by checking out the agenda for each day. And although our panelists may have disagreed on issues like the speed at which AI is disrupting the enterprise software universe, these Silicon Valley and Boston investors were in agreement about two main things: the depth of the New York tech ecosystem and the changing dynamic between founders and entrepreneurs.
As Kleiner Perkins partner Eric Feng said, “I was blown away by the quality of the companies. NYC is one of the most interesting ecosystems for consumer startups and for Primary to have curated the absolute top of the list was incredibly impressive.”
On the founder side, we heard again and again sentiments akin to this founder’s enthusiastic comment, which came through our anonymous survey: “You never get the chance to meet that many senior partners in one day. It just doesn't happen!”
While we won’t go into detail here with summaries of all the panel discussions, it is worth highlighting a few interesting themes and comments. The first panel of the Summit was a group of all-star consumer investors, moderated by LHV’s Eric Hippeau. Eric opened by asking the VCs for comments on things that stand out positively or negatively about NYC. There was overwhelming agreement when Greylock’s Josh Elman nailed it, saying “The diversity and richness of the community here is a huge plus. It’s unlike any other US city in that regard. The culture around media and brand marketing is just way better out here. So when I think about companies for whom hiring people with those skills are going to be a key thing, including many ecommerce and media companies, this is the best place for them.”
Perhaps most engaging to the audience was our decision to tackle one of today’s most important topics with a panel on culture, diversity and governance. Bain Capital Ventures’ Scott Friend was brave enough to step in and moderate, and managed the discussion masterfully. Interestingly, there was unanimity amongst the VC panelists - Bessemer’s Kent Bennet, NEA’s Dayna Grayson, BBG’s Susan Lyne, and Spark’s Kevin Thau - that their portfolio companies did a materially better job with diversity than their own firms have done. But they see a real lack of diversity in the tech community across the board. When asked how we’ll enact more change on this issue, Spark’s Thau offered, “You have to get to the point where people truly believe that it’s a strategic imperative and advantage to have a more diverse employee base. That has to become embedded in the thinking of the organization.” NEA’s Grayson believes in the old adage of that which gets measured gets managed. “It has to come down to strict metrics management. People have to be held accountable for the numbers.” Ultimately, Susan Lyne offered the most specifically actionable feedback: “The boardroom is where this needs to start. Get diversity in the boardroom and you won’t have to worry about accountability cascading all the way down.”
As both organizers of the NYC Tech Summit and active participants in the NYC Tech community, we were thrilled with the turnout of the event and with the value delivered and received on each side of the VC-founder equation. Virtually every panelist declared that New York was, if not the largest, then the second-largest market in their portfolio, and their increasing allocation to our market is certainly a source of pride for us. But Accel’s Brian O’Malley, clearly a big NYC Tech fan, also encouraged us all to maintain perspective on what really matters. “I see a lot of celebration of fundraises and the like as events that are somehow an end in themselves. But they’re not. Fundraises are just a ticket to having a chance at taking that capital and building and growing something meaningful. That’s what matters.” It’s a fair point, and one that we believe will continue to play out as we see large exits like Jet.com, Moat, and Yext inspire entrepreneurs to build increasingly large companies and chase even bigger exits down the road. We are humbled to be a part of this thriving ecosystem and to have had the opportunity to give the country’s leading investors an inside look at NYC’s most disruptive minds. We can’t wait for next year’s event!