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Study reveals optimism for start-ups

Business First of Buffalo - by Matt Chandler
Wednesday, June 23, 2010

A study commissioned by Watson Bennett Colligan & Schechter LLP offers a bright outlook for start-up companies in the region.

The report was prepared by Jeffrey Sohl, director for the center for venture research at the University of New Hampshire. Titled, “The Early Stage Equity Market in the Buffalo-Niagara Falls Area,” it was completed on June 21, will be released at the Explore Buffalo’s Angel Investor breakfast June 24 at the Albright Knox Art Gallery from 7:30 to 9:30 A.M.

The study analyzed the Buffalo-Niagara region’s ability to create start-up companies in the high-tech fields that produce higher wage jobs and employment opportunities as well as the ability of the local angel investor network to finance the capital needs of these seed and start-up companies. Some of the report’s findings include:

• The Buffalo-Niagara MSA in 2009 ranked 86th out of 200 MSAs in its ability to create and sustain jobs. The year-over-year increase places the Buffalo-Niagara region number 4 on the list of the largest increases in rankings (spots climbed since 2008) representing an increase in 94 places from 2008 rankings.

• Out of 393 high-tech centers in the United States the Buffalo-Niagara region now ranks 85th. High-tech accounted for 25,989 jobs in the Buffalo-Niagara region with an average wage of $67,600, compared with the average local wage of $36,400.

• Almost 37 percent of the investment opportunities reviewed by the local angel group had received funding. This number is double the national average of 14.5 percent acceptance rate of investments reviewed.

• There are as many as an additional 100 angel investors residing in Western New York that could join the angel investment group if they were made aware of the opportunities for such investing.

“It’s a very exciting time be an angel investor in Buffalo as this report states that in 2009 there was a significant increase in seed and start-up stage companies right here in our own backyard,” said David Colligan, a partner at Watson Bennett, “Essentially, this report tells us that there is high quality deal flow for the local angel investor.”

The firm hopes the study will help the Buffalo-Niagara business community benchmark their progress in creating high-tech opportunities for both start-up companies and angel investors in this region against other upstate areas and national averages.