Mt. Vernon Register-News

Community News Network

July 1, 2013

Did this man really just become New York City's first tech billionaire?

When you think of New York City's burgeoning startup scene, you might think of trendy social-media companies like Foursquare or Tumblr or e-commerce sites like Gilt Groupe. You might think of the Brooklyn-based startups that are helping to forge the new DIY economy, like MakerBot, Etsy and Kickstarter. A couple of those startups - Tumblr and MakerBot - recently sold for huge sums. A couple of others could be in line for substantial IPOs.

But none, according to Bloomberg News, can lay claim to producing Silicon Alley's first billionaire. That honor, Bloomberg asserts, went last week to a far less flashy name: Shutterstock, the stock-photography site whose licensed images adorn millions of ads and hastily composed blog posts across the Web, including some on Slate. The company went public in October and has seen its shares soar. Late last week, founder Jonathan Oringer's 55-percent stake in the company was valued at $1 billion. Citing RBC Capital Markets analyst Andre Sequin, Bloomberg declared Oringer "the first billionaire to be created in Silicon Alley."

If true, that's a significant landmark in the growth of a scene that is fast surpassing Boston as the nation's second-largest tech hub. But how do we know Oringer is really the first?

I called Sequin to find out. He told me he was a little surprised that Bloomberg had him making the claim quite so definitively. Sequin clarified to me that Oringer is the scene's first billionaire founder "as far as I know." He added that he "couldn't come up with anyone else" who meets the criteria: a New York tech or new-media startup founder who owns enough of a company that his own share translates to $1 billion or more upon exit (or on the stock market, if the company has gone public).

So while Tumblr recently sold to Yahoo for $1.1 billion - heralded as the city's biggest-ever venture-backed startup exit - Tumblr founder David Karp doesn't qualify, because his stake in the company was only about 25 percent. Not that Karp isn't plenty rich. But he's not a billionaire, even on paper.

Any other candidates? Business Insider's Nicholas Carlson, who knows the scene better than most, suggested via Twitter a name that is probably familiar to the Bloomberg reporters who wrote the piece: Michael Bloomberg himself. "Would you consider him tech?" Bloomberg's Sarah Frier asked. "Yes," said Carlson. "He built a private Internet." Fair enough - tech is an amorphous category in any case.

But as Carlson conceded, Bloomberg's success story dates to an earlier era, before local tech publications sprouted up in the mid-'90s to coin the term and cover the local scene. On the other hand, some argue that the term Silicon Alley is itself outdated. Among them is venture capitalist Fred Wilson - who, come to think of it, might have a claim to the title himself, having achieved a reported net worth of over $1 billion by investing in some of the city's biggest success stories. But he's a venture capitalist, not a founder, so it seems reasonable to exclude him and his ilk from the running.

I checked with Anand Sanwal, who tracks the venture-capital market, and he said he couldn't confirm Sequin's inference because he doesn't track founder ownership. But he added that it "seems to be right." Sanwal's firm, CB Insights, released a list recently of New York's largest venture-backed exits, with Tumblr leading the way. He noted that the list doesn't include Shutterstock, because Oringer didn't take venture-capital money - which helps explain why he still has so much control of the company.

Until someone proves otherwise, then, Oringer's claim to the title can probably stand. But how much longer will he remain alone in the billionaire's club? Despite the wild growth of the city's startup scene in recent years, it may be longer than you think: Crain's' list of the city's top tech IPO candidates is headlined by Gilt, Fab, and AppNexus, none of which has been valued above $750 million. That said, the New York Tech Meetup's list of "made in NY" startups boasts a dizzying 592 companies and counting: Viggle, Vimeo, Vindico, Visual Revenue, Vivastream, Vixely, Voxel, and Voxy, to name just a few of the V's. Who knows if there's a Google or Facebook among them - but it's a good bet that there's at least another Shutterstock.

               

        

1
Text Only
Community News Network
  • Why do wolves howl?

    Of all the myths that dog the wolf, none is more widely accepted than the idea that wolves howl at the moon. Images of wolves with their heads upturned, singing at the night sky, are as unquestioned as a goldfish's three-second memory or a dog's color-blindness (both also myths).

    April 18, 2014

  • quake.jpg Pennsylvania won’t take action following Ohio ruling on quakes, fracking

    Pennsylvania officials plan no action despite new Ohio rules on drilling that affect a seismically active area near the state line.

    April 18, 2014 1 Photo

  • The case for separate beds

    The other night I slept on a twin bed in the guest room of the house I share with my husband and our two kids.
    It was the best night's sleep I've had in years.

    April 17, 2014

  • Raw oysters spike U.S. rise in bacterial infections, CDC reports

    Raw oysters, so good with hot sauce, increasingly can carry something even more unsettling to the stomach: A bacteria linked to vomiting, diarrhea and pain.

    April 17, 2014

  • Low blood-sugar levels make for grousing spouses

    Husbands and wives reported being most unhappy with their spouses when their blood-sugar levels were lowest, usually at night, according to research released this week in the Proceedings of the National Academy of Sciences. Missing a meal, dieting or just being hungry may be the reason, researchers said.

    April 16, 2014

  • Screen Shot 2014-04-16 at 12.51.22 PM.png VIDEO: Toddler climbs into vending machine

    A child is safe after climbing into and getting stuck inside a claw crane machine at a Lincoln, Neb., bowling alley Monday.

    April 16, 2014 1 Photo

  • portraitoflotte.jpg VIDEO: From infant to teen in four minutes

    Dutch filmmaker Frans Hofmeester’s time lapse video of his daughter, Lotte — created by filming her every week from her birth until she turned 14 — has become a viral sensation.

    April 16, 2014 1 Photo

  • Victimized by the 'marriage penalty'

    In a few short months, I'll pass the milestone that every little girl dreams of: the day she swears - before family and God, in sickness and in health, all in the name of love - that she's willing to pay a much higher tax rate.

    April 15, 2014

  • treadmill-very-fast.jpg Tax deduction for a gym membership?

    April marks another tax season when millions of Americans will deduct expenses related to home ownership, children and education from their annual tax bill. These deductions exist because of their perceived value to society; they encourage behaviors that keep the wheels of the economy turning. So why shouldn't the tax code be revised to reward preventive health?

    April 15, 2014 1 Photo

  • Google acquires drone maker Titan Aerospace to spread Internet

    Google is adding drones to its fleets of robots and driverless cars.
    The Internet search company said it acquired Titan Aerospace, the maker of high-altitude, solar-powered satellites that provides customer access to data services around the world. Terms of the deal weren't disclosed.

    April 14, 2014

Twitter Updates
Facebook
Stocks