Cities Take Action to Support Early-stage Companies

New York City officials recently announced the launch of a $2 million seed fund to boost entrepreneurship and the local venture capital market. NYC Seed will provide up to $200,000 for seed-stage New York-based businesses and will offer mentoring and other support for client companies. The initiative is a partnership between several city and state organizations, including the Industrial Technology Assistance Corporation (ITAC), the New York City Investment Fund, the New York State Foundation for Science, Technology and Innovation (NYSTAR), the New York City Economic Development Corporation, and PolyTechnic University.
 
Mayor Michael Bloomberg made the announcement at the opening ceremonies for the city's inaugural Internet Week. The mayor hopes that both the event and the fund will help attract tech and digital media entrepreneurs to the city. Despite the size of New York's economy, the city has lagged behind Silicon Valley and Boston in capital resources for tech start-ups. NYC Seed is targeting extremely early-stage companies and first-time entrepreneurs. By creating this new fund and by connecting participating companies to other city resources, Mayor Bloomberg believes the new program will make the city a more desirable location for new companies.
 
New York is not, however, the only city to invest directly in private companies. Last year, San Jose invested $3 million in an Economic Development Catalyst Fund to support in companies with a physical presence in the city. Although San Jose is located within the world's most active venture capital market, city leaders launched the fund to aid firms that have the potential to generate much-needed quality jobs for lower-income workers. The fund, which has also attracted private investors, is expected to generate a profit and add to the city's revenue stream. San Jose is uniquely positioned to benefit from such a fund, since high-quality investment opportunities are more common in Silicon Valley than in the rest of the country.
 
Fresno recently announced the creation of a funding opportunity of its own for start-ups. The city's 250K Entrepreneurial Challenge is a business plan competition for entrepreneurs interested in locating their business in the region. Fresno and several collaborating institutions, including the Lyles Center of Innovation and Entrepreneurship at California State University, are offering $100,000 in cash and $150,000 in in-kind services to the winning entrepreneur. The top 10 finalists will present their business plans to a panel of local judges in October. Though this is the first year for the contest, the city expects the event to be held annually if it is successful this year.