Meridian Star

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 a see-through mouse is a big deal for scientists

    A group of Caltech researchers announced in Cell Thursday their success in making an entire organism transparent. Unfortunately, this isn't any kind of "Invisible Man" scenario: The organism in question is a mouse, and the mouse in question is quite dead.

    July 31, 2014

  • Screen Shot 2014-07-31 at 2.12.55 PM.png VIDEO: Five-year-old doesn't want her brother to grow up

    Sadie, an adorable 5-year-old from Phoenix, wants her brother to stay young forever, so much so that her emotional reaction to the thought of him getting older has drawn more than 10 million views on YouTube.

    July 31, 2014 1 Photo

  • lockport-police.jpg Police department turns to Facebook for guidance on use of 'negro'

    What seems to be a data entry mistake by a small town police department in western New York has turned into a social media firestorm centered around the word "negro" and whether it's acceptable to use in modern society.

    July 31, 2014 3 Photos

  • The virtues of lying

    Two computational scientists set out recently to simulate the effects of lying in a virtual human population. Their results, published in the Proceedings of the Royal Society B, show that lying is essential for the growth of a cohesive social network.

    July 31, 2014

  • Sunburn isn't the only sign of summer that can leave you itchy and blistered

    You've got a rash. You quickly rule out the usual suspects: You haven't been gardening or hiking or even picnicking, so it's probably not a plant irritant such as poison ivy or wild parsnip; likewise, it's probably not chiggers or ticks carrying Lyme disease; and you haven't been swimming in a pond, which can harbor the parasite that causes swimmer's itch.

    July 30, 2014

  • Survey results in legislation to battle sexual assault on campus

    Missouri U.S. Sen. Claire McCaskill joined a bipartisan group of senators Wednesday to announce legislation that aims to reduce the number of sexual assaults on college campuses.

    July 30, 2014

  • An alarming threat to airlines that no one's talking about

    It's been an abysmal year for the flying public. Planes have crashed in bad weather, disappeared over the Indian Ocean and tragically crossed paths with anti-aircraft missiles over Ukraine.

    July 30, 2014

  • Sharknado.jpg Sharknado 2 set to attack viewers tonight

    In the face of another "Sharknado" TV movie (the even-more-inane "Sharknado 2: The Second One," premiering Wednesday night on Syfy), there isn't much for a critic to say except to echo what the characters themselves so frequently scream when confronted by a great white shark spinning toward them in a funnel cloud:
    "LOOK OUT!!"

    July 30, 2014 1 Photo

  • 20140729-AMX-GIVHAN292.jpg Spanx stretches into new territory with jeans, but promised magic is elusive

    The Spanx empire of stomach-flattening, thigh-slimming, jiggle-reducing foundation garments has expanded to include what the brand promises is the mother of all body-shaping miracles: Spanx jeans.

    July 29, 2014 1 Photo

  • Medical marijuana opponents' most powerful argument is at odds with a mountain of research

    Opponents of marijuana legalization are rapidly losing the battle for hearts and minds. Simply put, the public understands that however you measure the consequences of marijuana use, the drug is significantly less harmful to users and society than tobacco or alcohol.

    July 29, 2014

Biz Marquee
New Today
Poll

A majority of House members approved a motion to sue President Obama for exceeding his constitutional boundaries. The lawsuit will focus on the presidents overhaul of health care. Do you think the lawsuit is warranted?

Yes
No
     View Results
Facebook
Facebook
Twitter Updates
Follow us on twitter
AP Video
Couple Channel Grief Into Soldiers' Retreat WWI Aviation Still Alive at Aerodrome in NY Raw: Rescuers at Taiwan Explosion Scene Raw: Woman Who Faced Death Over Faith in N.H. Clinton Before 9-11: Could Have Killed Bin Laden Netanyahu Vows to Destroy Hamas Tunnels Obama Slams Republicans Over Lawsuit House Leaders Trade Blame for Inaction Malaysian PM: Stop Fighting in Ukraine Cantor Warns of Instability, Terror in Farewell Ravens' Ray Rice: 'I Made a Huge Mistake' Florida Panther Rebound Upsets Ranchers Small Plane Crash in San Diego Parking Lot Busy Franco's Not Afraid of Overexposure Fighting Blocks Access to Ukraine Crash Site Dangerous Bacteria Kills One in Florida Workers Dig for Survivors After India Landslide Texas Scientists Study Ebola Virus Smartphone Powered Paper Plane Debuts at Airshow Southern Accent Reduction Class Cancelled in TN
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide