Venture Investments Keep Puffing as New York Inflates

Time for another installment of one of the New York tech scene’s favorite parlor games: “Is New York the Next Big Tech Juggernaut, or Is This a Bubble?, or What?” Today’s episode is brought to you by Crain’s New York Business, in an article titled “New York Tech’s Call: Veni, Vidi, VC.”

The piece focuses on venture capitalist and ersatz New York tech frontman Fred Wilson, but the real meat of the article comes a little ways down, where we get a few figures to chew over in assessing the tech market’s vitality. From January to September 2010, venture investors plunked down $17 billion on start-ups, a 30 percent year-over-year increase, says Crain’s.

A full $1.3 billion was deployed by New York-based VC firms. That’s a fifth as much as firms in Silicon Valley, for those who wonder if the city is challenging the California hub for VC dominance. Still, local VCs say the gap is narrowing and startups in such areas as financial services, advertising and data analysis have caught the attention of the biggest players.

“A full $1.3 billion” represents less than 10 percent of the national allocation, but there has been considerable evidence that New York start-up investment is on the upswing: New York recently surpassed Boston in start-up population, and angel investment is a hot new trend.

The question seems to have become whether New York’s thriving start-up community represents overenthusiasm on the part of investors (Fred Wilson is watchful for a New York tech bubble), or whether lower front-end costs mean New York tech is fairly valued. In the meantime, frenzy over Facebook provides plenty of reason for tech investors to enjoy the current upward ramp, and is paying big dividends for some New York firms.

mtaylor [at] | @mbrookstaylor

Venture Investments Keep Puffing as New York Inflates