MIT ventures to New York City
For our final trek of the year, MIT’s Venture Capital Club embarked on a very special journey to New York City. Though most commonly recognized as the world’s financial center, New York has developed a vibrant tech scene in recent years, earning the name “Silicon Alley”. Last year alone, New York startups raised approximately $11.5 billion in venture funding, making it the second largest VC market in the country. What was the purpose of our trip? To provide students with a profound interest in learning more about venture capital the rare opportunity to hear directly from some of New York’s top VCs including First Round Capital, BoxGroup, Insight Venture Partners, Greycroft, and General Catalyst.
Prior to becoming the first female partner in First Round history, Hayley Bay Barna was the Co-CEO of Birchbox, helping grow it from launch to over a million monthly subscribers, and raising $70 million in venture capital in the process. Hayley and Katia Beauchamp, her Co-Founder, came up with the idea for the beauty subscription service during their final semester in business school and launched the startup months later with seed capital from First Round and Accel Partners. After six years at the helm of her startup, Hayley decided to join First Round as an investor “in order to serve the founders of New York.” Over the years, First Round has invested in the likes of Warby Parker, Square, and Flatiron Health (recently acquired for $1.9 billion). They shared how “community is our differentiator” and have developed the First Round Network to help connect remarkable founders with one another.
BoxGroup seeks to invest at the earliest stage, focusing on entrepreneurs with the vision “to create the next generation of category-defining businesses.” Since BoxGroup manages private capital on behalf of the Tisch family, they are at the unique advantage of spending all of their time “with companies, not LPs.” The firm writes about 30 to 35 checks each year from $200–500K, typically alongside other investors. Today, their portfolio includes up-and-coming MIT startups like ClassPass and PillPack. Nimi Katragadda was promoted earlier this year to become the first female partner at the firm. Prior to founding BoxGroup, David Tisch and Adam Rothenberg worked together at Techstars NYC (founded by David). Their motto at Techstars? “Nothing ventured, nothing gained.”
Insight Venture Partners is one of the largest software focused funds in the world. In their own words, “all we do is software.” Over the course of 20+ years, Insight has raised $18 billion of capital, invested in more than 300 companies, and completed more than 200 M&A transactions for their portfolio companies. Notable past investments include Twitter and HelloFresh. Insight seeks to invest in “bootstrap companies” and retains an entire in-house consulting firm dedicated to accelerating their ability to sell to new customers, capture opportunity, and realize value. MIT alumnus and Greycroft Co-Founder, Ian Sigalow, also knows a thing or two about software. He has served as a lead investor on companies like Venmo and Braintree, helping transform the digital payments space. From experience, he emphasized how “all business is about people at the end of the day.”
Our final visit of the day took place at General Catalyst’s beautiful downtown office. The firm has made a name for itself taking large positions in innovative companies like Stripe and Snapchat years before they went mainstream. General Catalyst recently closed its biggest fund ever, raising $1.375 billion to focus on early- and growth-stage investments. Peter Boyce II has an unparalleled voice in the venture community and frequently serves as a judge for the Forbes 30 under 30 Change the World Competition. At General Catalyst, he helps supports the growth of exciting new companies like Cadre, which is reinventing the way we invest in Real Estate. Peter is also the Founder of Rough Draft Ventures (“RDV”), a student partnership that seeks to empower student entrepreneurs in their journey “from rough drafts to products in markets.” Since 2012, RDV has backed 90+ student startups, which have gone on to raise over $230 million in follow-on capital. Peter believes that technology has the unique power “to create, democratize, and expand our notions of human livelihood.”
Many will tell you to move to San Francisco if you wish to work in Tech or VC, just as you might move to Los Angeles to pursue a career in acting. However, as we saw firsthand, the spirit of innovation in NYC has never been stronger. The firms we visited encouraged us to “reimagine the cities we live in” as they explore fascinating new themes, from vertical farming to genetic sequencing. They expressed unbound enthusiasm for the tremendous talent in NYC waiting to “rewrite the script” on outdated industries with software (apparently Fintech was only the beginning). When MIT decided to expand its accelerator program this past year, NYC was the clear choice, given its leadership across Fashion, Media, Arts, Publishing, and Advertising, among other domains. So, why choose New York to launch or fund your new venture? Perhaps author John Steinbeck said it best: “once you have lived in New York and it has become your home, no place else is good enough.”
To learn more about MIT’s NYC Startup Studio, please visit: http://entrepreneurship.mit.edu/accelerator/mit-nyc-startup-studio/.
