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So first off, thanks everyone for coming. I think I know almost everyone here but my name's Tom Schryver. I'm the Director of the Center for Regional Economic Advancement at Cornell. And we're one of the entities that helped Rev become a reality. And we are the administrator of the organization.
I want to talk for a second about what we're trying to do here today. You're going to see around, these pamphlets here. And you can see on the screen behind me, this thing that says State of the Startup Economy. I want to admit first and foremost, you know, we're startup people. We're entrepreneurs ourselves. So this is a little aspirational as entrepreneurs and startups often are.
If you open this book and expect all the answers, you're not going to find them. You're going to find some answers to some things. And you're also going to find some things that invite new questions. Really, our purpose here today is to try and convene people in the community that have an interest in startups, that are part of the startup ecosystem, that help support startups and care about whether or not this is a great place to start and grow a new business, to try and share information and to start a conversation that we hope will go on for months and years to come about how we can be most effective at having a great pace of startup growth.
So to that end, I want to also thank-- well, first, all of you for being here. We do have one elected official here. So thank you Anna Kelles from the County Legislature for coming. Its always great to see our elected officials at events like this and supporting the startup community.
So we've got three great panels here today. And we promise to get you out on time, so I will take advantage of the fact that I've been given a microphone for just a couple of minutes to set the table, but I promise I won't take too long. I want to start with a little bit of data. You know, we're here. We're a data-driven kind of folk.
And so one thing that I want to start off with, which is about talking about the pace of startup creation. So like a lot of people, we use Kauffman Foundation data a lot. Kauffman Foundation's been a big supporter of startups around the country and beyond. And one of the things that we're seeing and we're seeing here in town is an uptick in entrepreneurial activity.
And you can see here that off the bottom, which is right around the 2013, 2014, you had a lot of startup activity actually kind of inversely correlated to the market downturn in the mid 2000s. It kind of dropped as the market was recovering and as the economy is recovering. We're now starting to see an uptick again, and it's something that we're seeing here in town as well.
So another fact that I want to give you that impacts why we do what we do. Kauffman Foundation has also been leading on a lot of great information about job creation, where do jobs come from, as a report that they've been updating year over year over the last few years. And what they find consistently is that young companies, new companies, especially those that turn into big companies, create by far the most jobs.
And you can see here that companies that are zero to five years old over this multi-year period ending in 2014 created five times the jobs of companies that are five years old or older. Which just goes to show how important it is for communities like ours in regions like ours to focus on helping people starting growing new businesses.
So what are the kind of assets that we've got here? I think you guys know that here in Ithaca we're a little bit of a college town, right? That should be news to absolutely nobody. But, interestingly, if you look at university R&D as kind of a foundational asset-- it is one of the foundational assets upon which an innovation economy is built-- we actually have more. This is the Empire State development definitions of regions. We have more university R&D here in the Southern tier largely because of Cornell, but also because of Binghamton University, also because of Ithaca College and so on than anywhere else in the state.
And per capita, we have way more students than anywhere else in the state. We've got over 60,000 students here in the Southern tier in a region of 650,000 and about 30,000 of those students here in Tompkins County. So you would think, then, a lot of upstate opportunity-- both student population and innovation in terms of university R&D uptick in entrepreneurship.
What does the venture capital picture look like, then, in terms of helping support these businesses and helping them grow. It shouldn't surprise anybody here that the picture is pretty bleak in terms of the upstate/downstate divide. When I ask people what they think the upstate/downstate divide is, they'll usually say, gosh, I don't know-- 80/20.
Well, actually, we looked at CB Insights data. Thank you, by the way, to our team and our interns for coming through all this stuff. It's actually 92/8. So we're still pretty weak in terms of developing sources of capital here upstate. There's a lot of sparks of light, if you will, if you don't mind me using the Bush "thousand points of light," right? And you're going to hear about some of those on an investor panel later in terms of people who are working extremely hard to bring investment into the community.
So let me talk about a couple of examples here that you're going to hear about and you're going to see in this book-- about who the funders are that have helped us get where we are today. So let me call out an example of GiveGab. Charlie Mulligan's here. Where's Charlie? Charlie's in the back.
Charlie and I actually were just talking about the fact that a lot of the ideas that turned into Rev happened at a meeting we had at your office. What was it? In 2013? Two or three offices ago, I think, for GiveGab. So GiveGab's a great illustrative example of how the power of a local investor, in this case, Cayuga Venture Fund and Jen Tegan, who's on the board of GiveGab, served as a lead to this company. And by being the lead investor locally who could work with the company helped kind of grease the skids and create a pathway for investors outside of Ithaca to say, yes, it makes sense to invest here because we can count on the folks that are here working with that company.
We're also starting to see some examples of some big global and national investors being willing to come into Ithaca to invest when they find opportunities that they think are compelling enough. So an example here is Ursa Space Systems, which recently closed a Series A round, of I think it was $8 million, from both RRE Ventures, which is a New York City-based top tier venture fund, and NEA, which is a fund that's really around the country but with offices in Palo Alto as well as in Baltimore, a multibillion dollar venture fund.
So we are starting to see more indications, over time, of these large scale investors being willing to come in here. We've seen it before as well with some deals that Cayuga Venture Fund has led. We also have a strong and growing angel investor community. So Firelight Camps which, honestly, is a little bit of a nontraditional venture deal. You may be familiar with them as the glamping company that has their pilot location up at La Tourelle. They are now looking to expand around the country. And Susan Fleming, who's a local educator in the Hotel school and active board member and angel investor, has been part of the syndicate that's helped them get where they need to go.
So the good news is we're already starting to see an impact of what these companies are doing on the local and regional community. So you're going to hear from some entrepreneurs one of the panels about to come. But the good news is, they're already starting to hire. So these six companies are all ones that are affiliated with us here at Rev.
There are other companies around affiliated with other incubators, and also starting and growing, that are starting to have a meaningful impact on the local employment picture. And just to give you a sense, from last year we had over 100-- or, I'm sorry, over 200 employees at the companies that were Rev members. They added over 90 jobs and raised over 21 million dollars.
So the kind of companies that we're looking to work with here have three characteristics. And I think getting back to the point about what the Kauffman Foundation study showed, is that the kind of companies that actually grow jobs in the meaningful amounts that we're looking for are ones that are young, moving fast, have high growth potential, and have the opportunity to create wealth, not just here locally, but by selling products and services outside the region. So these are the companies that we've got to focus on and the kind that you're going to hear more about today.
So one of the questions that often comes up, and you're going to see it here in the opening letter of our brochure, is oftentimes, people will talk about, what can Ithaca do to be the next Silicon Valley? Can Ithaca be the Silicon Valley of blah, blah, blah, whatever it may be? And I want to tell you, I don't think any of us actually care to pursue that line of thinking. And if there's one thing that I can ask of you here today, it would be to please take that message away from this as well.
We have no interest in being anyone else. We want to be the best us we can be. And we've got a lot of tremendous assets here that can make us a strong and great Ithaca and can make us a strong and great southern-tier region in upstate New York. So this was actually a Zillow listing that I sent my colleagues here from a trip out to Silicon Valley a couple of months ago.
This is a otherwise nondescript, four-bedroom house, 1,800 square feet, on a-- what is it? I think it's a 6,000 square foot lot. So the size of the lot is not that much bigger than the house. And the estimate is what? 3.9 million, right? There's a lot that we can do to be very attractive to people who are looking to starting growing new businesses in a great community.
So one question that we also get that I want to address head on is, what about the startups that leave? We have plenty of examples of companies that have been with us here that have then gone on to do other things in other places. So an example of a Rev member company, and one that I've worked with through my board service at TCAD, is Ithaca Hummus.
So Ithaca Hummus still branded Ithaca Hummus. For a variety of reasons they decided to no longer produce on their own here in Tompkins County and are working with a co-packer in Rochester. Or an example like Maidbot, a company that came out of the hardware accelerator that we run here at Rev. In fact, you can see all this stuff in the back that we asked folks to clean up. But they're hard at work on prototypes this summer.
Maidbot made a lot of progress but decided to move their main base of operations to where their funding was coming from in Austin, Texas. Or Eversound, another company that was a Rev member company came out of eLab, which is the student business accelerator at Cornell, has raised money through the Cornell Angel Network and moved to be close to their production and product design shop in New Hampshire.
Or OrthoFit, a company that we're working with currently, also an eLab alum company. Cornell PhD is working on adaptive gloves for repetitive stress injury that are now part of MassChallenge. One thing that we found with all of these companies is that they all still love it here. They all still are advocates for Ithaca. They're all advocates for this community.
And so one other message that I'd like you guys to take away from this is that when people do move on, our opportunity is to keep them as part of our fan club, keep them part of our family, and help them continue to make connections. And what we found, for example, with Eversound, is just the other day, Jake Reisch, who's the founder of Eversound, came in to do a couple hour video session with our hardware accelerator teams to help them get up to speed and make those kinds of connections.
So let me just talk a little bit about what Rev is. So you are here in our downtown business incubator. It's administered by Cornell, as I mentioned. It's a partnership between Cornell, Ithaca College, and TC3. The main purpose we have here is to work with local startups and help convene the local entrepreneurial community and to help people starting grow new businesses.
As I mentioned, we've got a lot of assets here-- great R&D, lots of students, a legacy in the region of hardware and manufacturing, and a lot of entrepreneurs who've made a go of it over the last 30 years, frankly, without a lot of the infrastructure that exists today. And we can leverage their experience and their connections to succeed.
What we are finding is that the state is focusing on this area lot. They're putting capital to work. I want to call out Clayton Besch from the back. Hey, Clayton. We'll hear from Clayton in a little bit. But Clayton works for New York state as part of their venture fund. And we're seeing a lot more entrepreneurs who are interested in finding opportunities to stay and grow here in Ithaca and leverage the resources that are here.
So I want to just mention a couple of programs that you may have heard of, that we're also a part of, that are connected here just to kind of give you a little bit of the lay of the land. One is the Southern Tier Startup Alliance, which we also administer. It's a regional incubation network. It's a member organization of business incubators including Rev, including the McGovern Center up at Cornell, the Koffman Southern Tier Incubator in Binghamton, IncubatorWorks in Painted Post.
I mentioned the hardware accelerator. We've got teams right now working in an 11-week intensive summer program to develop new products going [? mapping a ?] prototype. And we're working with a team called NextCorps, which is our kind of partner organization in Rochester to expand what we do for people working in physical products.
We work on a program funded by the National Science Foundation across upstate New York and beyond called the UNY I-Corps Node, which helps people with commercialization assessments of new inventions and new technologies. And then, of course, you've got 76West, a NYSERDA clean energy business competition with a million dollar top prize. And we're starting to see some really great traction of companies that have won prize money in the first two years of 76West stay and grow in this region and in Ithaca in particular. And we're in year three of that right now. And we're super excited about the 20 companies that are moving forward in that competition to six prize winners.
So I just want to draw your attention to one other thing, which is I'm just giving you a very quick overview of the overall ecosystem. But it is a very complicated place. And one of the questions I asked a panel of entrepreneurs a week or two ago is, we've got all of these different programs and all of these different acronyms. And every time you turn around, it seems like New York state is starting a new thing with a new acronym. How do you kind of navigate that process? And frankly, how much do you care about when one program ends and another program begins?
The answer is, we need help figuring it out. That's not our core competency as an entrepreneur, as a startup. But honestly, we don't really care about when our program ends or begins, right? When does Rev turn into Southern Tier Startup Alliance or the hardware accelerator or whatever. They don't really care. They're laser focused, as they should be, on growing their business.
So let me give an example of Ecolectra, a company represented here today, that participated in a variety of different programs. So they were part of NEXUS-NY, which is a NextCorps, NYSERDA-funded proof of concept center helping them get up to speed. A lot of what NEXUS does is very similar to what the UNY I-Corps Node is now trying to do.
They were members of Rev then got admitted to the McGovern Center where they're able to get lab resources that suited their needs better than we can do here. And so from their perspective, they're a community success story even though they're moving across a variety of different programs to get where they need to go. And so I would just encourage you to think of it that way as you think about all of these different programs. The state and others are going to be willing to fund different things at different times. Our job as entrepreneur supporters is to help the startups and the entrepreneurs themselves navigate those waters so that they can get where they need to go.
So we're very grateful to all the people who helped us get here. We have a wide variety of different funders. We have a variety of different supporters. And particularly on the capital side, I want to call out few people you're going to hear about in the panel coming up. Marnie LaVigne is here from Launch NY. So Launch NY is a key partner of the Southern Tier Startup Alliance.
We help them provide EIR services to companies through the STSA across the region, and Rev is one of those business incubators. A lot of companies that we've worked with have started to access capital through Launch NY's seed fund and through programs like New York State. We've got Elisa Miller out here from Chloe Capital as well.
So we're starting to see a lot of other supporters come into the network to help companies start and grow. So with that, I want to turn it over, in a minute, to a couple of panels so you can hear from entrepreneurs, providers of capital, and talk about the real estate landscape. But before I do that, I want to hand it over to Mary Opperman from Cornell and my boss.
[APPLAUSE]
MARY OPPERMAN: Thanks, Tom. I'm too short. If I stand down there, you'll never see me. So thank you all for coming. This is a great turnout. I hope you have a good-- can you hear me through this? OK, good. Tom did a great overview, as he always does. I did want him to put back that picture of that house in Palo Alto so we can just all feel better about ourselves.
So people have asked me, why did we start way back when? Why did the university and Ithaca college and TC3 start Rev. And why, interestingly, did David Skorton ask the Head of Human Resources-- that's me-- to spearhead that effort? And the answer to that is actually fairly simple. We knew-- the college presidents knew that the vibrancy of this community is vitally important to our three higher ed institutions.
But also, quite frankly, we care about this community. We live here. It matters to us. And why the human resource person, partly because I'm just pushy, and I cared a lot about it, but also because we knew that higher ed would not be on a high-growth trajectory. And we needed to look at how we could support the community as they diversified the economy.
It was something that we were just starting off doing in New York with Mayor Bloomberg. It became Cornell Tech. We wanted to do the right thing here in our local community, and Rev was a step in that direction. I just want to take a minute, also, and say that, well, I think Tom is right. Some of the state programs in particular can sometimes be confusing. The overarching strategy of the governor to focus on upstate New York has been really a game changer for us.
The regional councils have gotten the opportunity to step back and think about what matters and what's important and what will work in each of our communities. And for us, what we know is that growing the businesses that we have here and really moving entrepreneurial startups is our sweet spot. That's what we do really well in this community.
And we have some secret weapons. And that is the connection between higher ed and those startups and growth businesses that we have in the area. Why? Well, obviously, one of those is because of the great ideas that are generated out of our faculty and staff. But the other is our students. We have the opportunity to keep them here, keep their ideas here, maybe long term and maybe short term.
But to Tom's point, if they stay and grow a business that eventually goes, they still have their roots here. And so that deep loyalty that they felt to their Alma Mater becomes a deep loyalty to our community. And so I really believe that what we do here at Rev is create meaningful connections for businesses, hopefully that will stay here forever. But even if they stay here for a short time, we've grown their roots to our community, and that we'll give back to us and back to us.
As you know, our member companies are already creating jobs-- 90 in the last year. A job is so important to a human being's sense of relevance to the world around them and to their family. And the future is in small companies and startups. And we have the opportunity here in our community to be a relevant player.
I agree. We don't want to be the next Silicon Valley. Although, if you own. I don't know if you noticed, but on that picture, that $3 million house was only worth 350,000 in 1993. So, you know, if you own. Just saying. But we have the opportunity to take what we're already good at and create a jumping-off point to be an even better community than we are today.
Not to be a different kind of a community, but to take what we know we want to do, support the people that want to do that even more here, and make ourselves even better. And that comes, I think, from the passion we all feel about being part of this community. You just can't buy that. That's something that happens when you really invest here. And I mean invest of yourself. And that allows people to have a sense of this community as well as, really, the growing personal regard and respect you have when you have a job that means something to you.
So we give just a taste of that to our students when they work through Rev in internships on really fascinating work that our companies are doing. And that, we hope, and we've already seen, both through the eLab but even here at Rev, helps them to start to get their creative juices flowing and think about doing something right here in our community.
So as you heard, the startup community is strong. And what I'm here to say is Cornell's commitment to that startup community continues. But we need to continue to attract startups and retain them and help them set their roots here. So we want to move right on to our panels who are going to help us understand how to do that.
Startups face many challenges. And a very significant one, as Tom mentioned, is funding. So I'd like to introduce to you Jason [? Salfie, ?] Jason, the moderator of our first panel today on investment. Jason's going to tell you a bit about his experience as a startup and help us understand more about the challenges facing startups seeking investors in our area. Jason?
JASON: [INAUDIBLE]. Thank you.
[APPLAUSE]
Tom Schryver, executive director of the Center for Regional Economic Advancement, gives the keynote presentation at the State of the Startup Economy summit hosted at Rev: Ithaca Startup Works. Schryver discusses national startup trends and compares them to regional and local forecasts for entrepreneurs. He also discusses the challenges facing startups locally and suggests ways to attract and retain more startups in Ithaca, NY.
