NYC Jump Starting Green Innovation with First Incubator
As I walk into the NYC ACRE, I can feel the buzz of energy. On my left Rentricity in a small office that has access to diversity inside and out. They have just come back from a tour of the New York City’s waste water plants to see if Rentricity’s water-pressure energy recovery systems can be adapted to these sites and installed to generate energy from the water flow and pressure.
With US unemployment rates at 9.6 percent a 26-year high, New York City is making it easier to incubate the entrepreneurial spirit with the opening of the Varick Street Incubator.
Anyone with a plan for a small business can apply for a space in the incubator. The perks include low rent, access to conference rooms, a receptionist, a mailing address, access to interns from universities and a buzz of engaged minds all in one open space fostering collaboration and the sharing of ideas.
To build out the right environment the city is spending $15 million over five years. The city hopes to attract private capital in the form of Angel investment from interested individuals seeking to hold early equity in fledgling new business. On top of this it will draw on $30 million in unused 9/11 federal funds.
Most startup businesses seek space elsewhere – New Jersey, New Ark, Brooklyn because rental costs in New York city are prohibitive to growth especially when startups have bigger issues to deal with such as attracting the right people and staying alive. The incubator uses one floor of the Varick Street building. The 16,500-square-feet serves 35 fledgling companies. “Since the incubator’s opening, tenants housed at 160 Varick have created upwards of 110 jobs, hired more than 250 freelancers and interns, and raised more than $12 million in venture funding.” The incubator works closely with the Venture community to facilitate relationships between capital and ideas. With the costs accessible the incubator is attracting innovation to the city.
Within the Varick Street incubator a targeted cleantech incubator the New York City Accelerator for a Clean and Renewable Economy (NYC ACRE) is growing. NYC ACRE is a NYU-Poly initiative, seeded by a four year, $1.5M grant from
NYSERDA Today NYC ACRE hosts 5 physical tenants and three virtual tenants.
Unlike other incubators that fail to grow companies, with tenants remaining for years. The NYC ACRE has a strict policy that allows companies to rent a space for only 6 month. The leases are renewed only if the companies achieve agreed upon milestones keeping the company on track in terms of timing and financial perspective.
In July 2010 the NYU-Poly Incubator celebrated success. Five companies graduated which constitutes achieving desired funding, growing above 15 employees or needing resources the incubator can not provide. These companies include energy efficiency focused company Ecological, fixed-income brokerage platform iTB Holdings, scheduling company Hotlist, company intelligence focused CB Insights and digital photo company Pixable.
Although Rentricity has not graduated yet, the company is well on its way. Rentricity’s first commercial installation for the Pennsylvania water authority is now online and generating energy.
Please share what your state is doing to foster energy innovation.
Article by Elena Potylitsine, a strategy, risk and finance consultant. Elena closely follows the Renewable Energy Sector and helps promising start-ups reach the growth stage.
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