11 top VCs discuss the future of New York startups

'Don't bet against the Big Apple'

New York City was an initial U.S. hotspot for the COVID-19 pandemic, and it’s also one of the most expensive cities in the world — so you might think startups would be anxious to leave.

However, when we surveyed a number of New York-based venture capitalists, they seemed bullish about the city’s future as a startup and technology hub. As AF Ventures’ David Levinson put it, “New York simply has too much to offer, from its richly diverse population, cultural significance and vast collection of industries to lose its entrepreneurial spirit.”

Lest you think this is just reflexive NYC boosting, several of our respondents offered stats and historical analyses to back up their arguments. They also discussed industries that are likely to flourish and how the shift to remote work will affect local startups.

Here’s who we interviewed:

Keep in mind that if you’re on the hunt for an investor, several of these VCs are industry specific, which they note in their answers.

Jessica Lin, Work-Bench

How much is local investing a focus for you now?

Very much so – we continue to be extremely bullish on investments in enterprise tech in NYC with over 70% of our Work-Bench portfolio is based in the city. Since 2014, there has been over $10 billion of venture funding towards enterprise startups alone, and that number is only growing. We believe the next generation of enterprise tech giants will come out of NYC, given its density of Fortune 500 customers. Regardless of COVID-19, building next to your customers is always an incredible advantage.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

Our Work-Bench enterprise startups based in NYC moved quickly to work from home and have made the best of the situation.

If anything, many of our enterprise startups have been relatively resilient during today’s economic shifts. So far, we’ve seen the Fortune 500 demonstrate an increased need and adoption for improved technology areas such as software to improve developer collaboration and productivity, or intelligent process automation.

Additionally, many enterprise startups were already poised with the tools and capabilities to work from home. While many of us live in small, city apartments and miss the office space and socialization, transitioning at-home was relatively easy compared to other industries with higher in-person demands.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

Building a hub for all things enterprise tech in NYC has been a part of our core mission since starting Work-Bench 6+ years ago, and hosting up to 200 events a year.

We feel fortunate to have been able to transition these events online. Our NY Enterprise Tech Meetup continues to have 250+ attendees per month, and if anything, it’s enabled our community to grow globally – with attendees dialing in from the West Coast, Canada, UK, Israel, and more.

We believe the NYC enterprise ecosystem will adapt and ultimately come out stronger.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

While consumer sectors are getting hit hard, we’re actually seeing increased demand for offerings from enterprise startups.

Fortune 500 companies need new technologies and capabilities more than ever, given that many legacy tech incumbents can no longer meet most of their needs. In our portfolio, we’re seeing pull in many areas including everything from automation for document extraction, to platforms that support with managing incidents and software reliability, to customer success software to assess customer health and reduce churn, and precision mental healthcare benefits to support employees in these trying times.

Here are a few examples of our portfolio companies seeing uptick in Fortune 500 customer demand due to COVID-19 and the new priorities coming out of the pandemic:

  • FireHydrant is an incident response platform helping with service reliability which is especially important given increased infrastructure demands during COVID-19
  • Spring Health is a precision mental health benefit platform, which was already seeing growth from mental health issues in our country, and unfortunately COVID-19 has exacerbated the problem
  • Catalyst is a modern platform for Customer Success and is needed to help companies retain existing customers
  • Arthur is a model monitoring solution, which is needed given the heterogeneous ML environments in Fortune 500 companies and the increased scrutiny for what’s operating in production given the rapidly changing world, and therefore underlying assumptions in models, right now

Any other thoughts you want to share with TechCrunch readers?

NYC is one of the most diverse cities in the country. We have witnessed incredible change not only over the past few months, but also the past few weeks. My hope is that investors (including ourselves at Work-Bench) hold themselves accountable to better promote diversity within our own industry to bring about long-awaited and lasting change.

Alexa von Tobel, Inspired Capital

How much is local investing a focus for you now?

Inspired is based in NYC, and while we invest across the country, we are incredibly passionate about partnering with companies rooted here. Our team has personally founded companies in New York; I started LearnVest here and my partner Lucy Deland started Paperless Post. When we launched Inspired last year, we did so with the goal of supporting early-stage companies in our own NYC ecosystem. And for portfolio companies outside of New York, we’ve found that being here is an advantage, as we can be an on-the-ground resource on the east coast.

We have definitely seen the momentum of NY startups continue over the past few months and have met with many great local founders over Zoom.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

The challenges startups are facing in New York are quite similar to those startups are facing across the country—they’ve had to make a rapid shift toward fully distributed teams and face a new economic climate.

In New York, it was clear early on how serious COVID would be, and I think that forced New York startups to adjust quickly. We moved as fast as possible to share guidance with our portfolio—my partner Penny Pritzker and I started by hosting a webinar in March to share our advice for leading companies through an economic downturn. We’ve seen our portfolio companies stay nimble, like Rho, the small business bank which quickly started helping its customers in obtaining PPP loans, and Chief, the vetted women’s network, which expanded its digital programming.

Much like on the west coast, we’re facing a long road before we’re back in the office, so all NY startups will need to figure out how to keep making progress with teams that are staying at home.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

Absolutely. I’ve seen NYC grow into the powerful startup hub it’s become over the last decade, and I think that momentum will continue. Now that we’ve learned high productivity is indeed possible remotely, we expect to see companies maintain some element of a remote workforce within their broad hiring plans. But for startups in their earliest stages, I think there’s still a power to sitting side by side as you build a business. When founders are making their first hires and inking their first deals, NYC remains an incredible place to do that.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

I started LearnVest in New York because this city has long been the center of finance. Layer on the fact that New York’s startup infrastructure has grown tremendously, and I think New York remains a great place to start a company. Fintech companies will continue to thrive here, and I also am keeping a close eye on local innovation across restaurant and food tech, healthtech, and the next generation of social platforms.

Any other thoughts you want to share with TechCrunch readers?

While this is an unprecedented moment economically, we believe there are massive opportunities for new innovation to develop right now. For early-stage companies, this is a great time to be heads-down and building toward your bigger vision. One silver lining to these recent challenges is that founders who display true grit and perseverance stand out. Those are qualities synonymous with New York founders, and I’m excited to partner with the next generation of “recession entrepreneurs.”

Eric Hippeau, Lerer Hippeau

How much is local investing a focus for you now?

We are NY-first investors and the most active VC firm in the city. Local investing has always been our priority, and it is more so now than ever before given the pandemic’s impact on New York. However, we make a large number of investments outside of New York, particularly if our extensive NY network can be useful to the company.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

Some categories are performing well during this period, and others have been hit hard. Companies have had to rethink roles, benefits, office space, communication and KPIs, which is easier for early-stage companies to some degree than larger organizations. Companies that entered this period strong will come out stronger and those who were struggling will feel the impact the most. This is true for New York and elsewhere.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

New York is resilient and will come back stronger than ever, but it will take some time. The most innovative businesses are often started in a downturn. These periods shine a light on systematic gaps and key problems that fuel creative solutions and entrepreneurism.

Remote working is a trend that will continue to be integrated into every business as appropriate once offices begin to reopen. Businesses are looking to make up for losses they’ve experienced, so we’ll see many companies rethink their physical office space needs and rely even more heavily on digital resources for employees to work effectively. New York excels at software, so we expect to see innovation in remote working, learning and healthcare software continue to accelerate.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

Healthcare technology and telemedicine have done well as they have become a necessity. COVID-19 has also shed a light on where there are gaps in health care. We’ve seen our New York-based health care investments including K Health, Medly and Klara step up in a real way to address patient needs during this time — be it telemedicine, on-demand prescription delivery or doctor-patient communication. We expect to see new innovations in healthtech emerge with New York as a hotspot.

On-demand fitness is another industry that’s seeing a boost. There was a rising popularity for at-home, on-demand fitness services before the crisis, and COVID-19 has accelerated the industry’s mass appeal. Mirror, one of our investments, is one example. Peloton is another that’s clearly benefiting. And ClassPass has adapted as well. All are New York companies.

Remote working and learning software have been essential, and we should expect these businesses to continue to have strong performance as they’re more universally adopted. Companies of all sizes need software collaboration tools in place to support their changing workforce. Air, which is workplace collaboration software for creative teams and one of our more recent investments, is well-positioned to address that need. I expect to see new innovations emerge as New York figures out how to get back to work in the months to come.

Chad Anderson, Space Capital

How much is local investing a focus for you now?

We invest globally. In fact, that was one of the main reasons we picked NYC as our HQ. We are a sector-focused fund and invest exclusively in the space economy. The vast majority of global space entrepreneurship is in the Unites States and Europe, so NYC is optimally situated between those two geographies.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

There is no denying that things are strange right now with the city on full lockdown. But as a fund we have been able to effectively shift to working remotely and our NY-based portfolio companies have as well. Space enables the global economy and so, by definition, our portfolio companies are building global-scale businesses.

One in particular, Arbol, is an agtech platform using satellite data and, despite the disruptions from COVID-19, their platform has been rapidly growing and onboarding crop insurance agents as the agriculture markets continue to feed the world’s population.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

I believe the startup climate in NY will only continue to grow, for three key reasons: NYC is a global financial hub, there is a ton of great talent here and the eastern time zone has significant advantages for enabling global business. In terms of time zone, the West Coast of the U.S. is on an island out in the middle of the pacific. If you want to build a global-scale business, I think NYC is much more amendable to working across time zones and geographies, particularly in Europe, where the startup scene is growing rapidly as well.

Are there particular industry sectors that you expect to do uniquely well or poorly in NYC?

Simultaneously, this is a time of incredible risk and incredible opportunity. While many venture-backed companies are retrenching, many of our portfolio companies are seeing increased demand for their products and services. There are northeast- and NY-based startups that are focused on unlocking the value in space technology stacks, which are helping us understand and respond to the threat of COVID-19, that will continue to thrive over the next year.

For example, Geospatial Intelligence is helping businesses and governments monitor their supply chains, their facilities and the macroeconomic environment from space. GeoInt is enabling new agtech and insurtech capabilities that are becoming increasingly important to ensure continuity in this dynamic time. GPS applications are tracking the movement of people and helping us to understand the massive potential impact of the virus and how can quickly it can spread. With remote work straining bandwidth, satellite communications are stepping in to fill the gap and also providing remote connectivity, supporting telemedicine and telehealth.

Nihal Mehta, Eniac Ventures

How much is local investing a focus for you now?

Venture, especially at the seed stage, is in many ways still a local game. We believe the New York market is very underserved from an institutional seed perspective. There is a relative dearth of local leading institutional seed firms that are technically focused like Eniac. Many seed and Series A firms have set up satellite offices in New York but there are few fully planted here that pursue the deals that fit Eniac’s focus and we collaborate with the few that do.

When coupled with the local supply/demand imbalance, our deep relationships and track record (Attentive, Anchor, Boxed, mParticle and others) make New York a very attractive market for Eniac to double down on. We will continue our NYC focus especially now that we do not need to travel to meet founders in person.

We recognize that SF and the Bay remains the biggest and most competitive market in early stage venture capital. Rather than chasing every hot deal, we focus on companies that exhibit one of two criteria. First are companies that are founded by special people whom we have already built a relationship with across our 20 years each in the tech industry. Second are companies who align with a very specific thesis we are working on and thus especially knowledgeable about.

This dual-headed strategy has allowed us to win deals in the Bay Area at better prices than others in our cohort. We will continue our SF strategy as we have an office there and can meet founders in person without travel.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

We don’t see much impact to NYC startups even though NYC may be the pandemic’s epicenter, probably given NYC’s shelter-in-place has been taken much more seriously than the rest of the country. While some people may leave NYC, it will still be the top place young educated people will want to live because of its unparalleled social and cultural benefits.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

After 9/11 and the 2008 financial crisis, people thought NYC would lose all its talent but the inverse happened. People want to be close to the pulse and there’s no louder pulse than NYC. We think NYC tech will come out of the crisis stronger than ever for the following reasons:

  • 42 of the Fortune 500 are HQ’d in NYC, which is the largest concentration anywhere in the world, making it most attractive for enterprise startups.
  • Tech is still NYC’s 8th largest industry, so it has quite a bit of room to grow; this also reflects the diversity of NYC’s GDP.
  • Over 50% of NYC unicorns have diverse founders.
  • Over the last 10 years, VC dollars invested in NYC companies has grown 50% faster than Silicon Valley. The number of companies valued at $200 million or more is up 10x and exits are also up more than 10x. (Source: Primary Ventures, May 2020)
  • For the first time in NYC’s tech history, NYC has multiple VC-backed public decacorns (Datadog, mongoDB, Peloton, Etsy) that will spawn the next generation of founders and will continue to attract talent into the burgeoning tech scene.

Are there particular industry sectors that you expect to do uniquely well or poorly in NYC?

We remain focused on core themes around digital transformation of large GDP sectors that will continue to get disrupted by NYC startups given the swath of industries represented in the city.

We will be sharing an analysis of sectors we believe will drive investment activity in a post-COVID world focused on the second order effects of the pandemic and its impact. A preview of industries we believe are ripe for opportunity broadly locally include the future of work, healthcare, fintech, supply chain and entertainment with second order investment areas that include the tooling required to serve these sectors including privacy, security, compliance, accessibility and data.

David Levinson, AF Ventures

How much is local investing a focus for you now?

Being a NY-based consumer venture fund we are tapped into and unconditionally supportive of NY-born startups, though we are geographically agnostic and invest across the U.S. As is typical for the emerging, better-for-you consumer space, many of its entrepreneurs are coastally situated. But entrepreneurship is geographically blind and there are pockets that have developed all over the country.

For example, we’ve noticed a vibrant up-and-coming food and beverage ecosystem in Boise, Idaho, where we just recently made an investment in Proud Source Water. We’re on the hunt for great teams and brands, regardless of geography.

That all said, travel limitations and the ability to “break bread” with entrepreneurs has forced us to get creative in our diligence. While we may not be able to hop on an airplane and visit a management team, we certainly can conduct socially distanced meetings with NY metro area companies, so there is something to be said for homegrown opportunities and the immediate benefits of investing locally. Given how hard NYC has been hit relative to other areas, our local founders will be forced to develop the most enterprising solutions for building brands in the post-COVID era.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

NY has become the de facto epicenter of the COVID-19 outbreak. Food service and hospitality businesses have taken a severe hit, and it remains to be seen how those sectors will emerge from the quarantine in the near term. There will need to be a recalibration on how founders and investors think about four-wall economics. For the [digitally native vertical brands] with a physical retail component, portions of top-line growth have stalled out resulting in an e-comm reprioritization.

It’s safe to assume that any business with a disproportionate amount of their revenue concentrated in the NY-area should expect to see a steeper, longer uphill battle on reactivating this retail component as we are weeks, if not months, behind other regions in our reopening efforts.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

Never sell NYC and its citizens short – we’ve endured our fair share of crises before. However, the city will look much different on the other side of COVID-19. Whether the talent pool and venture funds are based in Manhattan or its surrounding areas should not really matter so long as the concept of the workplace evolves accordingly.

There will be a new definition of work-life integration whereby a hybrid model composed of remote and in-office work arrangements or “hoteling” could start to take shape. Clearly, the advancement of technology has allowed for distributed teams and organizations, but the necessity of human interaction is critical, especially during those formative company innings. Teams often can’t fully gel when solely relying on virtual means – at least not yet. There is a clear bottom line rationale for these changes as well.

Hopefully, leadership teams will embrace open-mindedness in exploring the optimal level of remote work as the local capital and talent pool should remain intact. New York simply has too much to offer, from its richly diverse population, cultural significance and vast collection of industries to lose its entrepreneurial spirit.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

Locally speaking, emerging consumers brands that traditionally relied on in-store demos and promotional activity across physical retail channels must now find creative methods of enticing consumer discovery in the digital world. Food and beverage startups should consider curated and conventional e-tail solutions as well as DTC fulfillment methods as priority near-term distribution strategies. Further to that, marketing teams will need to innovate their media campaigns to convey the value prop and appeal that in some cases are best suited for IRL (e.g., articulating taste and texture). It will be fascinating to see how competing brands find novel means to break through.

The pandemic will accelerate the already steady beating drum for health and wellness demand across CPG categories. Coming out of a once-in-a-lifetime health crisis, consumers will search for products that provide clear functional health benefits, such as immuno-support and stress relief. NY-based startups have easy access to the front end of the adoption curve — no reason to shy away from that now.

Hans Morris, Nyca Partners

How much is local investing a focus for you now?

While Nyca is based in NYC, Nyca actually is a contraction of NY and CA, so we have many investments in both New York and California. We also have invested in companies in Boston, Philadelphia, Washington, Chicago, Portland, London, Israel, Singapore and several other cities. We don’t specifically target New York or any other geography in making our decisions. But being proximate to the center of the financial ecosystem, which is undeniably New York, definitely means that we are plugged into the NY fintech startup scene.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

I think so far the effect has been relatively modest. Several terrific NYC-based companies have been created and funded, and everyone — both investors and entrepreneurs — seems to be coping quite well under the circumstances. Given that most companies have tech capacity on the cloud rather than servers they have to be near and the internet now works at home as well as it does in an office, we haven’t seen that much of a disruption.

Also, startups are by definition smaller companies and it is much easier for an employee at a company of five, 10 or even 100 employees to feel in the loop than it would be for those in a company of 1,000 people.

Finally, the fact that fintech startups are technology first, their employees are used to connecting through technology rather than face-to-face interactions.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

I have always been fascinated by the evolution of cities as business centers. The underlying concept for why cities exist at all is due to what are called agglomeration economies, or shared scale. In the 18th century this primarily related to the cost of transportation: cities grew because they were adjacent to efficient means of transportation of goods, which meant good ports, rivers, canals or railroads. The efficiency in transportation also led to other competitive advantages: shared scale in specialized labor, specialized suppliers and specialized distribution. This is why cities themselves specialized: in finance, boatbuilding, steel, autos, grain storage and shipping and everything else.

The decline of cities in the post-World War II period was largely a function of the changing economics of transportation and manufacturing: trucking, container shipping, the interstate highway system and robotics changed everything and made it so manufacturers could move to where labor was cheaper, either in nonunionized plants far from central cities or in emerging labor markets. In one decade alone (1970-80), New York City lost 600K manufacturing jobs!

But over the past 30 years, many cities have been transformed by the agglomeration economies of ideas. Having lots of well-educated, energetic people in one area creates powerful new ideas, expert labor, access to capital and often entirely new industries emerge as a result. New York is one of the best examples of this, and despite the costs (and fears, in some cases, like post-9/11), New York’s population and employment grew faster over the past decade than at any point since the 1920s.

So how does COVID affect agglomeration economies? I believe that the dramatic shift to WFH was a unique moment, and proved to everyone that it could work at scale, with remarkable effectiveness. Since housing and commuting are among the highest costs to employees, if WFH can enable companies to work without any loss in effectiveness, then it will prove to be a fundamental and permanent shift in work practices and can clearly reduce the interest in starting or building a business in New York City.

But here is an important point to weigh: If a business is in a highly competitive activity, and the people are similarly highly critical, then even a 5% loss in effectiveness could be a major competitive disadvantage. Despite the high cost of rent and personnel, tech companies have found it a key source of competitive advantage to locate in New York.

So my own view is, we will see a very likely shift of some positions out of NYC or to a remote working environment, but that many highly valued people at cutting edge companies will continue to want to be located in New York offices. And since financial services is such a core part of the NYC economy and labor force, I also expect this to be true in new fintech businesses. Even believing the rumors of some of the large financial services firms looking at the suburbs, all of their people live near NYC and so they won’t move far.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

I believe that those industries that rely on finance in some form will continue to do well locally. This of course includes the banks, but also the ancillary businesses that support them such as legal, accounting, consulting, etc. As mentioned above, as long as the banks continue to operate in the region, all of these adjacent businesses will have to be located nearby.

Work from home is most effective when individuals are building off of preexisting personal relationships. It is hard to be a new employee, or develop new relationships with a potential new partner, in the current environment. At some point in the future, the ability to meet face-to-face will return and companies who can put boots on the ground will do better than those with a purely distributed workforce.

Matt Turck, FirstMark

How much is local investing a focus for you now?

It’s a really interesting question — while we certainly invest all over North America and Europe, we at FirstMark very much consider New York to be our home and over the years we’ve been very active locally. In terms of investing of course, but also community building (for example, we run big events and communities like Data Driven NYC and Design Driven NYC).

So local investing has been important to us historically. But in a post-COVID, Zoom-first world, what does “local” mean? Recently I made my first investment where the process was entirely run through Zoom (nextmv, covered by TechCrunch). While they were reasonably local (Philadelphia), they could have been anywhere, and they’re building a distributed company anyway. We’ve felt comfortable with fully remote companies for years now — in particular through our experience of working with Invision, one of the original distributed companies, since their seed.

So maybe we just find ourselves over time naturally investing in more and more distributed companies, in part because that’s the type of companies founders are overwhelmingly going to want to build, going forward. It’s an evolving question, and how much the world shifts, and our investment focus changes as a result, depends in part on how long the current situation lasts. While New York will remain our home turf, I’m excited about the possibilities to invest in remote companies or outside of the usual tech hubs.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

I don’t think it’s been any better or worse than in other places. Everyone is on Zoom anyway. New Yorkers are a very resilient bunch, and work never really paused, even for a minute. People transitioned to remote quickly and smoothly.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

My sense is that the New York ecosystem will continue to thrive. New York has become a very full and rich tech ecosystem, and real-world network effects have been building for a while.

Also, New York is a place where people want to live — you see chatter on Twitter about people packing their bags and leaving the city, but my sense is that comparatively few will actually do that at the end of the day, and those who do will be promptly replaced by the next generation, which could make New York a younger city.

Finally, some of the key things that have made New York attractive from a startup perspective in the first place, like the density of potential customers and partners (Fortune 1000, etc.), are going to persist. Despite early rumors and statements to the contrary, what I’m hearing is that the big corporations (financial services, media, health, etc.) in NYC are planning on having employees back in their offices as quickly as possible, with a comparatively low percentage moving permanently to remote work.

That doesn’t mean there won’t be any changes in the NYC tech ecosystem. Perhaps you end up with a younger, more diverse mix of tech workers, working for a variety of companies, local or distributed, some in offices, but many (most?) from their homes or cafes or coworking spaces. There’s already been a lot of that, but perhaps it drastically accelerates.

Any other thoughts you want to share with TechCrunch readers?

I think we’re all living a giant experiment right now, where a number of trends are getting accelerated, whether we’re ready or not. It’s fascinating in some ways.

But we need to be deeply aware that the tech world, despite the recent wave of layoffs, has been very much spared so far. We all have the luxury to be able to work from home. In many cases, demand for the products that startups build, whether enterprise software, on-demand delivery or health products, has proven very resilient. Tech stocks are booming in financial markets. This is in stark contrast with the rest of the economy, which is experiencing really tough times.

This is particularly apparent in New York, first because it’s such a microcosm, and also because it has been the epicenter of the pandemic in the U.S. If there’s a time to be inclusive and think about how our industry can positively impact the world, it’s really now.

Zach Aarons, MetaProp

How much is local investing a focus for you now?

We have always operated our business with the mindset to dominate locally and influence globally. New York City is arguably the global center for the real estate industry so we have historically naturally gravitated to businesses based in New York City and the majority of the companies we now virtually “meet” are still primarily based in the New York area.

However, if you look at the new investments we have made post-COVID-19, the companies have been based in California and Florida. It’s still too early to know if that’s going to become a trend because the dataset is too small.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

Most local startups don’t expect their offices to reopen for a while, whereas startups in other states are going to see back to work happen much faster. Also, employees local to NYC are more likely to have contracted the novel coronavirus themselves or have friends and family who fell ill than people from other states.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

NYC will still serve as a hub for proptech. The brick-and-mortar real estate companies based here are not going to transition to become fully remote and distributed. They will still maintain a physical office presence here. Therefore, startups will always naturally gravitate toward at least having the sales and business development teams in the New York area.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

Tourism is an especially important component of the NYC economy that will be particularly impaired this year. Last year we welcomed 67 million tourists. The lack of tourism will have ripple effects on food and beverage, museums and retail sales. On the positive side, NYC is home to many enterprise technology companies that are currently thriving with the push to remote work.

Any other thoughts you want to share with TechCrunch readers?

Don’t bet against the Big Apple. New York has been pretty resilient historically.

Andrew Ive, Big Idea Ventures

How much is local investing a focus for you now?

At Big Idea Ventures we are focused on finding the best plant-based and cell-based food companies wherever they are in the world. COVID-19 is not impacting where and who we invest in as a great plant-based food company can literally come from anywhere. We’re investing in great plant-based companies from Singapore to Beijing, from Australia to Belgium and yes, we’re also investing in great plant-based and cell-based companies in New York and San Francisco.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

Whether the epicenter is currently in New York or some other location, a lockdown is a lockdown. The great thing about the startups we’re working with is they instantly responded to the challenges of COVID and the lockdown and found new ways to engage with their consumers. We’ve been proactively working with our companies to figure out how they can achieve their mission of bringing great tasting plant-based foods to more and more consumers.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

The best entrepreneurs know they don’t have time to waste and they need to focus on serving their customers with great products and services. They’ll change and pivot if they need to, building the right relationships any way they can. Remote or not, NYC entrepreneurs will continue to build great businesses and the city will continue to be an epicenter of innovation.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

I trust great local entrepreneurs to do well in ALL industry sectors. Like everything, it will come down to the people, the entrepreneurs themselves, to overcome adversity and to turn a challenge into a success. It’s what great entrepreneurs do and it’s what they’ve always done. Sure many will get knocked down, but the great ones will keep getting up until they’re successful.

Any other thoughts you want to share with TechCrunch readers?

Yeah, absolutely. Some impressive companies were started during recessions, when many people thought the founders were crazy to start a business. Netflix, Airbnb, Microsoft, Mailchimp, Trader Joe’s and others. If you have what it takes and you have the right business get going, don’t wait. And more female founders too please! And if you’re a founder in the food space — reach out.

Andrew Ackerman, Dreamit Ventures

How much is local investing a focus for you now?

Dreamit invests globally but many of us are based in NYC because of the rich concentration of startups here, especially in the industries that we currently actively invest in: Health tech, urbantech (proptech and contech), and secure tech.

In the short term, how do you think local startups have been affected by the fact that New York is the epicenter of the pandemic?

The pandemic is so widespread that it’s hard to conceive of a startup anywhere that is unaffected. B2B startups are especially sensitive to the conditions affecting their customer base. Health tech startups are finding it extremely difficult to get any attention from hospitals, both in generally and especially so in hard hit regions like NYC, for anything not directly related to COVID-19 … but the ones that are directly relevant are signing deals in record time on (virtual) handshakes.

Similarly, security concerns arising from widespread work-from-home have increased interest in startups addressing those concerns, other security challenges are on the back burner … and will likely remain this way for a while as employers craft and implement return-to-work strategies. In cities like NYC that are taking very cautious, methodical approaches to return to work, this dynamic will play out longer.

Lastly, whereas proptech startups are hit everywhere (viz., commercial landlords who are worried that 30%+ of their tenants might miss rent payments), construction is in many places deemed an “essential service” so contech startups are less impacted … except in places like NYC where construction is largely halted.

What do you expect to happen to the startup climate in NYC longer term, particularly if the shift to remote work continues? Will it still be a startup hub?

Generally speaking, remote work, telemedicine, distance learning, etc are all trends that are favorable to many startups and COVID has accelerated these trends, in many cases demolishing objections and resistance.

So for many startups, the long-term outlook is as good as pre-COVID if not better. I’ve always believed that startup location decisions are driven by access to capital, access to customers and where founders want to live. Access to capital has become a little more widespread but, at least on the B2B side, customers remain concentrated in larger cities giving NYC an enduring advantage in many sectors. Also, to the extent that startup founders skew young, NYC is pure and simply a more fun place to be.

Are there particular industry sectors that you expect to do uniquely well or poorly, locally?

In keeping with my customer-driven thesis, startups in the banking, media, advertising and similar sectors should all be active, or ideally based in, NYC. Fortunately for Dreamit’s investment theses, NYC is also home to some of the biggest and more tech forward hospital systems in the country, one of (if not) the largest concentration of large real estate companies in the world and is the corporate headquarters to 71 of the Fortune 500 companies (Chicago clocks in at #2 with 34) making it a very target-rich environment for secure tech startups who sell into the CISO (Chief Information Security Officer) suite.

Any other thoughts you want to share with TechCrunch readers?

Wash your hands.


Editor’s note: We strive to present a broad range of voices in our investor surveys, but we sometimes fall short. All of the respondents in the initial version of this survey were men.