Tuesday, July 21, 2015

Great news for tech startups and the City of Newark, NJ

Dan Ivers reports for NJ.com that:

Politicians and business magnates alike crowded into the downtown Newark office of Audible.com Monday morning to officially announce the launch of a venture fund aiming to carve out a brand-new identity for Newark - tech mecca.

Newark Venture Partners is aiming to raise $50 million to invest in a select group of start-up tech companies, all of which will be housed in a so-called "accelerator" that will help them develop ideas and grow with the help of various guiding hands.|

Officials and partners in the initiative said it is all part of a wide-ranging effort to transform Newark from a city struggling to recover from its industrial past to one embracing the tech-based economy of the future.

"I have a feeling that literally, when you put the stake in the ground, that all kinds of things will happen," said Donald Katz, Audible's CEO and Newark Venture Fund chairman.

As many 1,000 fledgling companies are expected to make their pitch to join the accelerator each year, all hoping to join a select group of less than 50 that will land initial investments of between $50,000 and $100,000.

The chosen start-ups will work out of a space downstairs from Audible's headquarters at One Washington Park, in a 25,000 square-foot space provided rent-free by Rutgers Business School. During their stay, they will receive mentoring from staff with Audible and other experienced business minds involved with the fund.

"Unlike the traditional venture capital, in our model...all of our companies that we invest in, we're going to bring them here," said Thomas Wisniewski, a veteran New York City angel investor who will help lead the fund.

The accelerator itself will  be equipped with a fiber-optic infrastructure that will provide the businesses with up to 10 gigabits of online data, officials said.

Mayor Ras Baraka said the service would be crucial to not only developing the companies in their infancy, but retaining them once they have outgrown the accelerator and are looking for a permanent home.

The case would likely be strengthened by Newark's various public transportation options, proximity to New York, tens of thousands of college students and abundance of available commercial space. The city could also consider tax incentives or other measures to help hold onto growing outfits.

Baraka added that each new engineering or other tech-related job is usually accompanied by up to five other service-based or entry-level positions needed to sustain new companies, all of which will help provide the city with much-needed jobs.

"It has a multiplier effect for the city, to help us push forward and get more Newarkers employed," he said.

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