There are sure a lot of people putting a fork into the Start-Up NY program and calling it done. Most of them are pundits; I don’t know of any that are actual entrepreneurs in the program.
New York Governor Andrew Cuomo founded the Start-Up NY program in an attempt to bring a state that has a net drain of people and business back into play. This may only be one tool in his box, but it is an important one.
The pundits have voiced a lot of criticism about the program, citing the money spent on advertising and the lack of jobs to date, but I have not noticed them offering any alternate solutions to the overarching problem Cuomo is trying to solve.
So let’s take for example, you’re in charge of a state that has more exports of jobs than imports.
A) Do nothing, stay the course with known losses and allow the drain to continue.
B) Try something different that might cost some money up front and take a little time, but potentially reverse the tide and result in net gains. Something a lot of other states are already doing successfully. You can call it investing, maybe even take the idea up a notch.
If you choose A, you are guaranteed the results of A: more unemployment, more drain and more decay. If you choose B, you might actually start something that could be big in the long run.
An insiders view
So what’s it like from my perspective? As stated in otherForbes stories, my company does partake in the pundits’ forbidden fruit… Oh No!
Hang-on… let me go back to 2014.
We were being pursued by the State of South Carolina to move my start-up (Efferent Labs) there. They had a lot of incentives, including cooperation from the three largest state universities (a big plus for a biotech start-up), tax incentives, assistance in many other areas, office space and meetings with investors; you name it, and a very low threat of snow!
Then we won a major economic development competition in Buffalo, New York – 43North – in October 2014. This competition was and is designed to bring good start-ups to New York to grow and succeed.
Along with our win, and a large investment in our company, we were also offered a lot of incentives.
One of the incentives was tax-free operation – no state taxes on the company or our qualified employees – making it more attractive for us to do business in New York than almost any other state in the union.
I signed my company on for one year in Buffalo, starting in January 2015, the snowiest and coldest winter in over a decade. It wasn’t free, it wasn’t without sacrifice, and it wasn’t (and isn’t) easy. Nothing worthwhile in life is easy.
It’s a long way from white, sandy beaches and sunshine galore, but we are not in the sunscreen business, we are in the life science sector – and as a start-up there is little time for the beach anyway. Tell that to my wife!
We accepted the terms and became a Start-Up NY company. It was a heck of a deal – hmmm… an incentive even?
Yes, it was incentive and since that time, our commitment term for 43North has expired. We are free to roam about the country with our company, but we are still in New York and more specifically, Buffalo. The first objective they had for my company with the Start-Up NY program was successful. Why?
First, I am a loyal person. When someone reaches out to me, treats me with respect and support, I reciprocate. Sure that sounds old fashioned – but that’s me.
Next, the terms of the deal under Start-Up NY are not onerous. We follow the rules of the program, and my company benefits. But, the State of New York also benefits. We have put money back into the economy by hiring employees and contractors, and purchasing equipment in New York.
Sure, we could have done this anywhere and still could, because other states reaching out to us to move our business to their communities.
We choose to stay here. That’s a big statement for me, as I hate snow! And my choice is in part because of the Start-Up NY program.
The pundits scream that the cost is huge and the net jobs created are few – and sure, both arguments are mostly valid today – but the state is not buying jobs.
Again, the state is not buying jobs with Start-Up NY. It is buying exposure and an investment into the State. It is, in part, a PR campaign! Seriously folks – yes jobs ARE being created, and no, its not going to happen overnight – but if the state stays the course they will see the benefits. Just not right away.
It’s not all that different from investing in the stock market. Or maybe a better analogy is a Venture Capitalist (VC) investing in young companies. Returns show over the long haul. If you look at a VC’s portfolio in year 2 or 3 you might say, “What the heck were they thinking?” but if you wait until year 6, you might say, “Why didn’t I invest in these companies?”
The plan is working in my ecosphere
I recall my parents calling me from Arizona in the spring of 2015, only four months into my first year in Buffalo. They had seen the ads about Start-Up NY on television, and were interested in what it was all about.
These were two people in their 80s and they understood the idea. They also were interested in coming to NY to see things again as it piqued their interest. Seems like the PR part was working a little there…
The bottom line is nothing ventured, nothing gained. Yes, there is a price but there is also a payback if you cool your heels and let us entrepreneurs make this happen.
You might look at Start-Up NY as a corporate handout – I don’t. Not because I am a recipient, but because I understand some basics in business. All states, in one fashion or another, provide incentives to attract business. The State of New York is rebooting and trying something different. And the state should be applauded its efforts.
Is the program perfect? Well, no. There are issues that should be looked into. For instance there are restrictions on when a new hire can actually benefit from the program: if they are hired with less than six months left in the year, they must wait until the next calendar year to participate in the tax incentives. And there are limits on where the business can be located. But all in all, the program has a lot of solid advantages.
Is there a guarantee that in the end it will work? Nope. But if you give it, and us, a chance to succeed maybe we will surprise you and actually perform. Our success will pay this investment back in jobs, taxes and development with dividends.
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