In an important piece of research recently released, two smart analysts have put numbers to what many of us active in economic development in New York State have long been saying: there exists a deep, fundamental mismatch between the stylistic preferences of regionally based venture-capital firms and the kinds of innovation emerging from the state’s university R&D community.

The study by Judy Albers and Tom Moebus – both well known and respected players in the statewide innovation ecosystem ((Judy, now an entrepreneurship professor at SUNY Geneseo co-founded the Pre Seed Workshop program, and Tom runs several innovation programs for the SUNY Research Foundation)) – employs data from NVCA and other sources to nail the case that while the amount of venture capital under management in New York City is rising, it is specializing heavily in digital technologies (IT, software, media) and focusing on capital-efficient “quick hits,” often at the expansion phase, with high potential for fast liquidity and outsized returns. Almost none of that potential is available upstate, and consequently almost no regionally managed capital goes there.

The authors show that while the VC industry in California and Massachusetts is more eclectic in its tastes, only a very small share of that money comes to New York to begin with, and exceptionally little makes its way upstate. That leaves ventures in what Albers and Moebus call the hard sciences (subdivided into the engineering technologies and life sciences) a long, hard slog with few early-stage investors (and almost no seed investors) either based here or deploying money anywhere in the state.

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