These are heady times for New York City’s tech scene, as I wrote about in Monday’s newspaper. But as local businesses find success and the city government talks about the flourishing industry as a firewall against finance’s boom and bust cycle, it is worth remembering one thing: this has happened before.
During the tech bubble in the late 1990s tech companies in New York found easy money, and talk of a new tech center based around “Silicon Alley” began heating up. Measured in terms of the amount of investment from venture capital firms, the city’s tech boom a decade ago dwarfs what is happening now.
Then the bubble burst.
The downturn hit New York hard. By 2002, venture funding in information technology companies in New York had fallen 94 percent from the level of two years before, according to data from the National Venture Capital Association. There was little change until 2006, when the beginning of the current upswing started.
Read the rest of this article at New York Times