The hoodie-clad millennials tap furiously at their laptops. They’re perched on couches or sitting at long, communal tables, munching on Fruit Loops from the built-in dispenser in the open kitchen.
Like their peers in San Francisco, these young entrepreneurs occupy a co-working space — in this case, AlleyNYC. With its industrial look and “work hard, play hard” philosophy, plus regular happy hours, AlleyNYC is typical of its genre.
Its location in Chelsea, on the West Side of Manhattan, makes it a hub for local entrepreneurs, particularly those in the tech scene. That cachet made it the perfect home for ICONYC Labs, an accelerator program that helps Israeli startups launch their businesses stateside.
Israel is home to nearly 7,000 high-tech companies, and nearly 80 percent of them are startups, according to a report from the business information firm Dun & Bradstreet. But despite its track record of innovation, Israeli startups often struggle with finding investors, and Israeli deals generally require entrepreneurs to cede a greater share of their companies than a typical American deal.
So a main goal of ICONYC Labs is to connect Israeli entrepreneurs with New York investors. Additionally, the program helps Israelis adapt their pitches and products to better appeal to American investors, who typically have a longer decision-making process than their Israeli counterparts.
“In America, it’s about building relationships over time, but that’s not something that’s in Israeli DNA,” said ICONYC co-founder Eyal Bino. “It’s definitely a mindset we are trying to change with our founders, and it’s not always an easy task.”
But this incubator program isn’t just about generating money. Through the shared workspace, the program also embeds Israeli startups in New York’s tech scene.
“While they’re here, they’re mingling with the other entrepreneurs in the kitchen,” said co-founder Arie Abecassis. “They want to be here and get to know New York, and one of the goals of this program is to help them exponentially expand their social network in tech.”
Other goals include providing mentorship, assistance with media relations and branding and operations support on logistics like immigration, banking and accounting. In addition to these services, ICONYC Labs provides the startups with $20,000 and office space in AlleyNYC in exchange for a small equity stake in the firms.
ICONYC Labs’ first cohort, which began last April and finished the end of October, included Myndlift, a mobile health solution targeting those who suffer from ADHD; Flux, a smart agricultural product enabling water-efficient growth of food and plants; DandyLoop, a cross-promotional marketplace for independent online stores to gain traffic; Clickspree, an ad-tech firm focused on video engagement and return for brands, and Gaonic, a platform for businesses to monitor Internet of Things data.
While working with ICONYC Labs, the companies’ founders must spend at least a week each month in New York, although many stay longer. ICONYC hosts networking events and fireside chats with high-profile startup success stories. It also sets pitch meetings with potential investors and advisers.
“At the end of the program, they’ll have the ability to expand their business to New York and raise money here,” Bino said.
Going forward, the incubator will shorten the program to four months and accept companies on a rolling basis. Two startups began in January; three more entered in February.
ICONYC staffers sift through hundreds of applicants to select — there’s no shortage of companies hoping to be the next Waze, the navigation app purchased by Google in 2013 for $966 million in cash.
Both Bino, 40, and Abecassis, 49, were born in Israel and live in the U.S. The pair, who met in 2014, saw a gulf between the growth potential of many Israeli startups — the talent and the ideas were strong — and their ability to connect with a wider variety of investors, and turn those connections into meaningful business opportunities.
In recent years, New York City has become a hub for Israeli-based startups — nearly 300 Israeli companies have a presence in the city. While Silicon Valley grabs a lot of the startup spotlight, New York sometimes makes more sense for Israeli entrepreneurs — the time difference (7 hours versus 10 hours) makes business calls more conducive, and it’s an easy train ride to Boston, Philadelphia and Washington, D.C.
“They see New York as the market where they can meet clients and investors as well as the big American corporations they want to do business with,” said Guy Franklin, founder of Israel Mapped in New York, which tracks the Israeli startup community.
Plus, in some ways, New York City is more culturally similar to Israel than Silicon Valley, Bino said.“There’s the food, the holidays. Israelis may not be able to see themselves renting a house in the suburbs in California, but they could live on the Upper West Side.”