When one thinks of New York City, towering skyscrapers, serious businessmen in black suits rushing off to do important financial work and shoppers clutching bags from the largest names in fashion comes to mind. New York’s image does not lend itself to being a start-up destination, despite their heavy financial industry. Boasting a landscape that includes branches of some of the largest companies in the world, it seems as though any company that wishes to succeed eventually comes to New York City. These companies are generally started elsewhere before finally expanding to include a New York branch. Historically known as one of the worst places to start a business, New York is taking steps to change that designation with a plan to attract businesses to the state and generate business revenue. What factors are helping New York edge out the competition in the start-up hub wars? Are there specific indicators to look for that can demonstrate a new king of the start-up hill?

Startup Hubs Around the World: New York

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In this article, we look at six essential elements of New York City as any start-up location that must be evaluated: 1) location, 2) tax incentives, 3) legal incentives, 4) availability of investors, 5) local resources & workforce, and 6) specialization.


Located on the eastern coast of the United States, this financial district is home to one of the leading start-up hubs in the world. As the city that never sleeps, New York is more than a tourist attraction. It is a convenient location near the coast of the United States, as well as a travel hub for almost everywhere in the world.

For European companies interested in expanding into the United States, New York is a direct flight and is easily accessible. With shorter international and domestic flights, start-up companies can reach investors and employees without additional time zone crunching.

A bustling metropolis, New York offers relocating employees a wealth of opportunities to take advantage of outside of work. For the young entrepreneur, working hours can be thought of as waking hours: whenever you are awake, you’re working. This creates an environment where it is completely reasonable to be working on a new coding sequence until 2 a.m. and suddenly realize that you are starving. Finding a restaurant open at that time of the morning? Not a problem for the start-up based in New York.

The streets in New York are a cross section of cultures and industries and have become rich in potential for start-ups. This climate of diversity lends itself to creativity and innovation unlike any other location. With the wide range of cultures all centrally located around the city, start-ups can draw on the rich heritage of the city to springboard their way to success and appeal to the broader public. In addition, the diverse cultural atmosphere of the city gives a multi-cultural appeal to the developers and programmers who may be moving to New York.

Another aspect of location is the process of getting your product into consumer’s hands. As a major hub of the United States, New York city is both an airport terminal and a shipping terminal. This can benefit the start-up that is outsourcing product around the world in large quantities; shipping via barge to China or other factories can be handled easily from the city. This reduces costs, transit time and complications as everything is near the company headquarters.


New initiatives make New York tax incentives increasingly attractive to start-up corporations. Start-Up NY has been touted as the most ambitious growth plan New York has seen. Developing specific tax free zones, the governor of NY has set his sights on an active, evolving start-up market that draws on the resources within the state. Designed to correlate to schools and colleges, the plan allows for a relationship between business and education that is focused on enterprise. The tax free zones are alWith the development of Start-Up NY’s tax free areas, businesses are encouraged to take advantage of the deductions, credits and exemptions the state offers. In an effort to develop and keep businesses, the tax free zone allows businesses to eliminate tax liability when they operate within a specified tax free district. This incentive applies to organization tax and license fees, commuter transportation taxes, real estate taxes and personal income taxes.

Critics of the tax free zones claim that the political posturing that results from these zones is the only real benefit. They criticize the plan as being so stringent and narrow in scope that very few will actually be able to take advantage of them. In addition, they are skeptical that the areas established as tax free zones will be locations that companies will want to operate in. The nay-sayers are vocal in their dismay over what seems to be a lot of big talk with very few actual positive results.

Advocates for the plan, however, are hopeful that the new focus on attracting start-ups to the New York area will bring a new surge of companies. It may not be a perfect plan, but is the first in what appears to be a long standing plan to improve the New York landscape with innovation and progress. They are adamant that by offering tax incentives to companies, the companies will be more likely to choose the New York area for their location.


Specific legal incentives for New York’s start-up hub are not as robust as other areas. The recent Start-Up New York initiative is beginning to change the incentives available but the process can be slow. However, due to the overall importance of the city, NY boasts branches of some of the largest law firms in the country. Having well-qualified legal counsel nearby gives start-up providers the guidance and backing they need to secure investments and funding in a legally binding transaction. Start-ups can choose from some of the largest names in legal counsel to help guide them through the process of developing their company. As more start-ups flock towards New York, the lawyers who have specialized in the start-up regulations will become more commonplace.


As a financial powerhouse, New York has some of the leading Venture Capital firms, angel investors and other equity investors already in the area – making it easier to promote the start-up to potential investors. Having a ‘home town’ advantage can be huge when considering approaching investors – they like to feel as though they can keep an eye on their investment easily if it is located within a short cab ride.

Another benefit to the New York start-up hub is the convergence of several key areas: fashion, finance, media, and advertising all within the city. This creates an atmosphere where collaboration or key partnerships can easily be formed, increasing the potential for success. The overall importance of innovation in all areas means that there is a wealth of investors who are looking for a diverse portfolio. Venture capital firms are beginning to notice the entrepreneurial atmosphere that is rising in New York and have begun to put their money towards encouraging that growth. Within the last few years, venture investors have put more money into New York start-ups than Silicon Valley. This indicates a growing recognition that there are innovations taking place in the Big Apple that aren’t being seen in other places around the world.

New York investors are relatively new to the start-up investing world. With that in mind, it is foolish to try to compare the investment strategies and successes of the long-established Silicon Valley with the relatively inexperienced New York market. Most tech start-ups don’t begin to truly reach their potential until after they have been working for at least 10 years. New York’s start-up history has not had enough time to fully develop, so the successes are still few. The challenge for New York investors will be to hold onto their investments long enough to see the larger payoff that some of the big Silicon Valley companies have become famous for.

Funding Availability in New York



The diversity of New York’s citizenship allows for newly arrived immigrants and companies to feel at home. There are a diverse number of cultural opportunities which will help make the company owner and potential employees feel at home in the Big Apple.

In addition, the nearby colleges and universities add to the quality of academic resources available for the start-up. This pool of well-educated personnel can improve training opportunities; and provide an ever ready collection of readily available staff or consultants. Established networks among students will extend far beyond the walls of the classroom, as students become employees and then entrepreneurs. The connections that they make can last for years, and can become the potential for collaboration and future jobs.

With several recent start-up success stories located in the New York area, web developers are increasingly attracted to the modern city. As an added bonus, while some of the larger tech companies establish offices in the New York area, growing pools of engineers have moved into the area to work.  Brought in to work at companies like Facebook and Twitter, the developers, programmers and engineers relocate to the Big Apple. As a result, other companies have begun to take advantage of the growing tech workforce. Building on the success of other start-ups, commerce has begun to realize that start-ups can succeed among the high rises.


The diversity of New York’s start-ups make it attractive to a range of industries: social media, mobile services and e-commerce have all found a foothold within in the streets of New York. This creates an environment where collaboration is not only smart, it is easily managed. Start-ups that develop out of existing industries have an advantage when the key participants have a familiarity with the benefits and incentives that exist in a location. Shoptiques, an online boutique, got its start in New York because of the fashion industry that has already dominated the area. By combining two great industries: fashion and technology, the founder of Shoptiques was able to capitalize on her pre-existing knowledge of the fashion industry to create a successful start-up launch.

Startup New York


Key start-ups that can trace their beginning to the fabled New York streets include: Foursquare, Kickstarter, the Muse, Birchbox and BuzzFeed. These start-ups are a cross-section of industries that clearly demonstrates the diversity that New York is faced with. Ranging from a crowd-source funding venture (Kickstarter), a career motivator (the Muse), a subscription beauty products box (Birchbox) and an internet news source (BuzzFeed). It is interesting to note the unique combination of industries that not only begin in New York, but thrive there as well.

Unlike other start-up hubs that seem to focus on a particular industry, New York has not established a clear identity of the types of start-ups most prevalent. Initial users of the new Start-Up NY plan are primarily biotech/medical companies, which perhaps may be an indication of the direction that New York will take as a hub. With a biotech incubator already established, a second-stage growth terminal ready, and a facility for mature companies prepared, New York is strategically positioning itself for future growth.

The growing popularity of New York as a start-up hub is due, in part, to the concerted effort that the government of the state is making. By establishing tech start-up as a priority, the full force of the government will be behind the start-up and give them the tools that they need to succeed. The attractive environment that is bursting with available resources, ready-made workforce and a culture that thrives on activity and innovation is key to the continuing development that New York is making. Establishing itself as a market for start-ups will take effort, but the payoff is immense. Drawing innovative technology, engineering, programming and other creative endeavors into the New York area will generate an atmosphere where form meets function, and the only limit is what you can conceive.

Often, necessity is the mother of invention. In some cases, products and services are developed as a response to a need or a crisis. In the world of start-ups, however, the impetus may simply be a desire to see what is possible. With world-class developers, the possibilities truly are endless. Ideas and products become realities when creativity abounds, without limitations or rules. While it may take twenty to thirty years to fully realize a well-developed start-up hub, the savvy investor knows that good things come to those who wait. The watchful eyes of investors all over the world will be tuned toward New York in the coming years. As it struggles to establish itself as a powerhouse in yet another area, it is determined to succeed on all fronts. Knowing how successful NY had been in other areas, one can easily make the prediction that they will once again rule.

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