The NYU Future Labs had an astoundingly good year in 2016, when several of its current and alumnus companies had large funding rounds or were acquired.
A few highlights include a $200 million raise by United Wind, the acquisition of Geometric Intelligence by Uber, a $30 million raise by Clarifai, a $15 million raise by Avanan, and several other raises of more than a million by about a dozen other companies. Not all of these are currently in the program, most have graduated. In all, the Future Labs report that its companies have an eye-popping 90 percent two-year survival rate and an aggregate valuation of over $1 billion.
For some context, the NYU Future Labs are made up of three smaller orgs, the Urban Future Lab, located on NYU Tandon’s campus in Downtown Brooklyn, the Digital Future Lab, located in Dumbo, and the Data Future Lab, in Manhattan. Between the three, there are about 60 companies in the program at any time. Membership in the labs is more flexible than at private incubators, in that companies can remain for up to two years.
How is it that the NYU Future Labs came about such success?
We asked Kurt Becker, the Vice Dean for Research, Innovation, and Entrepreneurship at NYU Tandon.
Technical.ly Brooklyn: Tell us about the history and progression of the Future Labs
Kurt Becker: Our history has been a natural progression paralleling the development of the entrepreneurial ecosystem in NYC from 2009 to now. There was a dearth of incubators supporting very early-stage science and engineering-based startups in the city in 2009, but the proliferation of co-working spaces since 2009 has shifted our focus away from such early stage ventures. …This is a more pressing need now for NYC than the support of very early stage startups.
TB: Could you provide some data or proof of the 90 percent survival and $1 billion impact claims? And then also, thoughts on why it is the Future Labs have been able to do better than the private markets?
KB: We keep track of which startups are accepted and which “graduate” so we know the “graduation rate.” Moreover, we track our graduates, so we know which companies are still in business two years after they leave our Future Labs (the “two-year survival rate”). Graduation rates and two-year survival rates are thus tracked and used as a measure of success.
The $1B market valuation of our graduates is based on the valuation of the companies when they are acquired or when they receive VC investment. In both cases, either the acquiring company or the VC firms do their due diligence, which includes arriving at a market valuation of the startup. While these figures are usually not made public, we have access to the data, but are not allowed to make individual valuations public. However, we are allowed to disclose the collective valuations for all graduates of our Future Labs.
Our success rate, compared to other incubators. accelerators etc. is the consequence of a combination of factors, first and most importantly, we are extremely selective in which startup we accept (our acceptance rate is less than 10 percent, comparable to the undergraduate acceptance rate of the most prestigious Ivy League universities). Secondly, we only accept startups in technology areas that are aligned with the research strengths of our faculty, so that we can provide the startups with access to faculty and students with expertise in the technology areas of the startups. Thirdly, we try to the best of our abilities to identify startups that have a strong team commitment to success and that have needs we can address through our broad portfolio of support services.
TB: What the goals of the Future Labs are and how they’ve been working toward them?
KB: The goal of the Future Labs is to create successful ventures from science and engineering based breakthroughs by providing the necessary support infrastructure to help new businesses succeed in their critical early-stage growth phase when they are vulnerable to failure. We work hard to continually improve our portfolio of support services including — among others — access to mentors and advisers, access to faculty and students, pro bono legal, accounting, HR, and marketing support, and networking with VCs.
TB: What are your thoughts on Brooklyn as a startup hub? How has it changed over the years? What are its strengths and where could it improve?
KB: Over the last few years (since the financial crisis of 2008), NYC has grown tremendously as a startup hub for certain technologies. Brooklyn has become the latest hot spot, with activities initially springing up in the Brooklyn Tech Triangle and now spreading to cover the “Innovation Coast” from Industry City in Sunset Park to the Brooklyn Navy Yard. Among its strengths are the relatively affordable (compared to Manhattan) rents, easy access to technical talent, and access to advanced manufacturing capabilities.-30-
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