NJTechWeekly.com asked some of the leaders of the tech community in New Jersey to evaluate the biggest challenge for the industry in 2014 and tell us how they would solve it.
Maxine Ballen, president and CEO of the New Jersey Technology Council:
I believe the ongoing obstacle the New Jersey tech community faces is remaining visible. As we all know, we have a very vibrant technology community in New Jersey but the rest of the world doesn’t know it. New Jersey’s reputation as a premier destination state for technology companies has eroded over the past six years. There are many contributory factors operating here. But one simple solution may lie with offering our tech companies opportunities to promote themselves. Some avenues to pursue may be economic development incentives, expanded marketing and public relations (PR) opportunities, to name a few.
New Jersey has a world-class tech community. Let’s make sure the rest of the world knows it too!
We need to be known! We need everyone in New Jersey to know about the entrepreneurial community! That includes government, investors, other entrepreneurs, as well as everyone else. Once we are well known the community will grow dramatically and we will gain the support we need!
I believe the biggest obstacle which NJ Entrepreneurs will face in 2014 is reduced capital for seed and early stage technology companies. Data from 2013 will probably show that Angel investing has either stayed the same or increased slightly. “First-in” investors will be reluctant primarily because they do not want to be the “training wheels” for first time entrepreneurs. An experienced and failed entrepreneur means that some investor (s) has lost their shirt. Failure should not be seen as a badge of honor. We’ll see more syndication of deals in order to spread the risk. We’ll demand earlier exists ($20 Million to $40 Million with less dilution) and expect a good ROI within 3 years. I believe more and more Angel investors will rely on group investments or invest in funds which participate in the management. These “baskets” of actively managed seed and early stage companies will hopefully spread and mitigate the start-up risk as well as increase the probability of a ROI in the near term.
I think the biggest hurdle will be building our separate communities, but still coming together unified to help each other build our communities as well. I feel more communication is needed. We can achieve this using what we know best, technology.
New Jersey’s rapidly growing tech ecosystem is alive and well. Funding for early-stage startups in the region continues to be an issue and, hopefully, the angel investor tax credit, among the addition of more rapidly growing startups, will help fuel a great 2014.
Judith Sheft, associate vice president, technology development, NJIT:
New Jersey’s entrepreneurial community should not be a “best kept secret.” A top priority for 2014 is to strengthen and expand the ecosystem. There should be more opportunities for startups to gather and exchange information, leveraging support from technical assistance providers, incubators, accelerators, meetups, state and local economic development agencies, trade associations and universities.
A continuing issue for the New Jersey tech entrepreneurial community is the gap between early-stage tech companies and funding entities. There is a shortage of angel investors and venture capital funds that make early-stage investments. Yet at the same time, the active angel investor groups in the area find it challenging to find high-potential companies that are investment-ready. The solution is a larger, more diverse group of angel investors and more opportunities for companies and investors to meet. New Jersey needs a more robust entrepreneurial community such as those in Northern California and the Boston/Cambridge area.
NJ’s biggest hurdle is that its entrepreneurial community is still in its infancy. Unfortunately, the lack of resources forces some startup founders to travel to places like New York City which wastes time and costs money. If a startup chooses to stay in N.J. it is faced with limited options (i.e. cowork space, developers, investors) and often suffers from a lack of external advice. The clear solution is to have a community in N.J. to meet the needs of startups. The movement toward this has already begun. However, the process can be accelerated if our current leaders start taking a more active role in driving our community’s development.