By John Feinberg and Jesse Friedlander
In the past week, three new tech companies joined Start-Up NY, Governor Andrew Cuomo’s initiative to stimulate the technology industry in New York. The program has had more than 15 start-ups join since the beginning of September, bringing the total count to 143 since the program’s inception in May 2013.
When the program started, it’s purpose was to “supercharge” the New York economy by expanding businesses by offering them opportunities to operate tax-free for a decade on-or-near New York State university campuses, where they would also get easy access to advanced research labs and industry experts for a very low cost.
“One of the ways we pay it back is through direct investment into the Buffalo economic system,” Peeyush Shrivastava said. Shrivastava started Genetesis from his dorm with his friends. The company focuses on providing invasive and precise cardiac monitoring equipment. Upon receiving several capital awards and most recently joining the Start-Up NY program, he was able to settle into office space at the University of Buffalo.
“A lot of the contracts that we do are happening in Buffalo. The capital we save with Start-Up NY is being doubled back into the economic system,” he said.
Like all other startup CEO’s, Doug Schmohl has been planning to expand his company but has had a difficult time finding young and eager minds.
“A startup can’t match the salaries of a large corporation but we can offer other perks such as no state income tax.” Schmol is the founder and CEO of FlightPartner, a company that works like any major airline booking services, but is designed for booking private jets for high-value clients. “That can be an eight percent savings,” he added.
Schmol’s and the other startups across the program are fighting to expand their companies when all young graduates want to work at Fortune-500 companies with six-figure starting salaries.
“In the early stages, you have to offer equity. They’re working to build their own company,” Schmohl said.
While many college graduates and companies are moving out of Long Island due to the rising taxes, living and operating costs, Start-Up New York has committed over 4,000 jobs and $183.4 million back into the economy in the next five years alone, according to predictions estimated by the Start-Up NY program directors. A total of 74 colleges and universities are participating in the program.
Executive Vice President of the Start-Up NY program, Leslie Whately, believes that integrating these companies with local universities is a great stepping stone for companies that don’t have the necessary networks in place, especially for those moving locations to new offices.
“After the 10 years of being involved with the university and community, you’ve developed great connections and are prospering from it,” she said.
Two companies are moving from far distances to Long Island to join the program and receive its benefits. Sybac Solar, based in Florida, will be expanding and forming a child company at Stony Brook called Iontraxx Inc. This startup will be creating software to track its parent company’s solar array system setups.
“What really drew us to Long Island was the existing knowledge of Stony Brook on wireless communications systems,” Arthur Madej, president of Sybac Solar and founder of Iontraxx, said. “The Advanced Energy Center also caught our attention after we met people there who knew a lot about the solar power industry.”
PhD Skin Care will be moving from California to the Long Island High Technology Incubator in Stony Brook’s Medical Park, founder and CEO Steven Isaacman, Ph.D. said. PhD Skin Care has been providing new formulas for over-the-counter skin care products. Isaacman is excited to explore what the university is going to offer his business.
“We’ll be working with the talent from the university to expand our company and attract new business,” he said.
Isaacman is planning to invite local students to participate in internships, and that’s also in the agenda of other CEOs. David Hershberg, CEO and Founder of STS Global Inc., said that internships are mutually beneficial in this business relationship with the school. STS Global has been using the space to design and manufacture telecommunications systems for their clients.
“We have a lot of opportunity here to interface with the students and faculty that can help us out and improve our R&D,” Hershberg said. “Internships offer valuable young minds at a cost-effective price for us and experience for them.”
The 143 companies currently in place will have a 10-year period to establish themselves in the community before their lease expires. Each month, the program is adding more businesses, establishing new connections with universities across New York State and increasing the size of its available rental space. Stony Brook University has tentative plans to acquire nearby land to expand its company incubator park, as well as build a new facility for additional medical companies to join its program in the coming years.