Getting a startup off the ground is a difficult task. ‘Incubators’ for startups do exist, and these usually give budding entrepreneurs money, mentorship, and connections in exchange for a share of the company’s profits.
Grand Central Tech takes a different approach. Instead of financing and having equity in the startups it takes under its wing, it provides free office space in its co-working building in New York City for a year, plus all the networking elements, with no strings attached.
There have already been over 1,000 applicants this year, 19 of which were successful. The intake become GCT’s annual ‘class’, of which it is the third of it’s kind. This year’s startups ranges from a startup that guarantees you’ll sell your house in six weeks to one that aims to change how women think about their periods.
The general idea is that by providing a year’s worth of free office space to these young startups, GCT will be able to convince them to stick around and rent the other 40,000 square feet of its coworking building, creating a hub for hot startups. This unique business model stems from the co-founders of GCT’s personal relationship with the millionaire property tycoons who own building in which the office space is being offered.
GCT’s origins lie in New York’s Regis High School, where co-founders Matthew Harrigan and Charles Bonello met as students. The school, much like the tech startup scheme, is free once you get in — in the school’s case, an anonymous benefactor set up a system to allow it to run tuition-free.
The pair decided in later life that they wanted to recreate that sort of model for businesses, and decided to try to run a tech accelerator at Regis during the empty summer months. They were able to set up the same “no rent, no equity” formula and even tapped recent grads of Regis for internships. The budding program caught the attention of the Millionaire tycoons the Milsteins’ accountant, and the GCT cofounders were able to supersize the program to what it is now.
The startups in GCT are meant to strengthen New York’s tech community, so many of them have a social mission or an eye toward bettering some aspect of life. Far from being a big money-making venture, GCT is primarily an endeavour designed to bolster the New York tech scene. It may come from unique beginnings, but the tech world could certainly benefits from more of this type of philanthropic business plan.