"What can VCs do to help the NYC tech community the most?"
This is a question I was recently asked by a New York VC.
My immediate answer:
Entrepreneur-In-Residence (EIR) Programs
We have hit critical mass for startup infrastructure in New York. New York has plenty of VC money. We have lots of co-working spaces. Rents in Manhattan (Flatiron, specifically) are getting very high but there are alternatives (Financial District, DUMBO).
Three times I have left my tech/startup position and considered starting a company. Three times I ran out of time/money/patience before I could pull all the moving parts together. Giving aspiring entrepreneurs the chance to pursue their startup ideas while providing some income would dramatically increase the number of experienced tech people attempting to start great companies in New York. There has been some progress in this area (Venrock, Accel) but there is a opportunity to accelerate the process.
Having additional EIR programs in NYC would help address a number of barriers to creating great companies:
The No-income Abyss - For people that have seen some success in their careers, they have been making income for while. Regardless of your monthly expenses, it’s very difficult to come to grips with the idea that every dollar spent is lost personal worth. Financial Runway is a very real thing, but the psychological toll is just as great. Providing some level of income to entrepreneurs helps remove this impediment.
Aligning the Planets - To start a company requires three very difficult things to happen at the same time:
1) You are at the right point in your life and career to take the risk.
2) Your co-founder is at the right point in your life and career to take the risk.
3) You must have an idea (or area of exploration) about which you are passionate.
These things rarely happen at the same time. EIR programs create a bigger opportunity window so that these things have more time to align. Often, startups don’t happen because of the timing of one of these things.
Fully-baked Ideas - Allowing entrepreneurs to view LOTS of incoming deal flow allows them to refine their idea and approach. More thought-out ideas and better pitches will result, leading to more startups. It will also help eliminate the terrible ideas, or the very common ones.
For these reasons, I think that more VCs in NYC should consider starting EIR programs, either formally or informally. There are clear benefits to the VC firms (domain expertise, fresh perspective, practical experience, deal flow, etc.) and I would like to believe they benefits would out-weigh the costs.