Give us your [rich], your tired, your huddled masses longing to be free

Posted on January 7, 2010. Filed under: startups, venture capital | Tags: , , |

Yesterday I dropped into office hours at a venture firm who I didn’t really know, but wanted to meet…the format was basically 5 or 6 entrepreneurs sit down and chat with the investors for 30 minutes in an informal conversation about everyone’s efforts.  My understanding is that if the venture firm thinks you’re high potential, they’ll give you a desk for 3-6 months.  That desk comes with free internet/coffee/conference rooms and the opportunity to collaborate with a bunch of other startups and share learnings and ideas…there’s also one dude from the firm who sort of hangs out there and spends time working on his own projects, but also providing guidance to the folks in the space…this model is a great contribution to the NYC startup community, and one which I think will yield fruit for the firm.  What amazed me, however, was not the new presence of this firm in NY, but rather the backgrounds of the other entrepreneurs in attendance.

For the last year, I have been listening to members of the New York startup community speculate about the migration of talent away from wall street toward entrepreneurial endeavors post financial apocalypse.  I largely viewed this thesis to be wishful thinking, as having worked on wall street myself after college, “investment banker” is not exactly the psychological profile I envision when i think of early stage entrepreneurs…but yesterday was the first real data I have absorbed which makes me question my skepticism.  It’s one thing for talented engineers who were engaged in algorithmic trading pre-meltdown to be recruited away to established venture-backed startups that could afford their 6 figure salaries.  But it is entirely another when 4 of the 5 early stage founders with whom I met hailed from Merrill Lynch, Citigroup, Morgan Stanley, and DE Shaw respectively (amazing btw that when I went to link to Merrill’s website using Google Chrome browser, I get this message:

An incompatible browser has been detected and your page layout and/or functionality may be effected.
This Merrill Lynch website (www.ml.com) is designed for viewing in the below browsers:
Microsoft Internet Explorer (I.E.) 5+ Download
Netscape 7+ Download
Firefox 0.8 + Download
Anyway, these are not guys who grew up programming in their garage before being scooped up by wall street recruiting at MIT (in fact one of them had spent $100K of his own hard earned wall street cash on an outsourced website for which he did not even know the language in which it was written…note: i actually liked that guy and thought he was pretty smart despite this shocking stat).  Rather, they were bright and ambitious young guys to whom Wall Street had obviously fallen from grace.

Through an investor’s lens, I think there will be some winners out of this generation and profile of NYC entrepreneur, but if I had to guess, I’d say it may be a little early to put my dollars into this group of folks. I’m more interested at the point where this class of wall street emigrants matures over the next 12-18 months (and natural selection/financial recovery seduces the ones who aren’t cut out for it back to wall street).  Those who remain, will likely represent the conversion from would-be lifetime financiers to would-be lifetime entrepreneurs, and they will be the ones to create companies that contribute to the renaissance of NYC entrepreneurship.

So, I know the sample size is relatively small, but I was excited to see the talk of a talent transfer in NY manifested in real life.  I’m assuming venture firms have had this empirical data point for quite some time, which can only hearten their recent commitments to our geography (see “NYC Venture Capital War” for more on that), but it was strange and refreshing to experience potential history in the making first hand.

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8 Responses to “Give us your [rich], your tired, your huddled masses longing to be free”

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12-18 months rings true. Where did you get that number from? Intuition or empirical evidence?

Intuition, sense of timeline for macro recovery, and typical startup cycle

Def interesting.I think they have learned something that comes with no price..as long as we learn from our past experiences..u have an amazing ability of absorbing and analyzing peoples emotions and ideas..keep up the good work..I hope u didn’t think I was black mailing u with the hound dog video..hence the 8th row knicks tickets ; ) let’s chill soon..

Jordan, having also been a former Wall Streeter, I heard and took part in a lot of talk about the start-up life. With the tremendous melt down we saw, it seemed like a no brainer to give it a go as the opportunity costs of leaving a finance job were basically nil. From the outside looking in, entrepreneurship seemed like the next promise land. You work with a small group, there is little bureaucracy, you create and market some great product, and have the potential to make a stupid amount of money. This couldn’t be farther from the truth. It is a risky endeavor and will likely yield nothing financially in the short term, which you have to be ok with. Like you’ve written about in the past, you must be devoted to your vision, network, evangelize, and do your homework – and be careful with your capital (esp. 100k!). Following the lean start-up model with real world testing / validation gives your venture its highest probability of realizing success.

Jeff, sometimes I wonder if you’re the only one who actually makes it through my entire post 🙂 … thanks for sharing your experience with everyone

I, too, read through your entire post, and like your perspective – optimistic.

coop, how would you handicap this group against the “typical” group that you would have seen in boston? if inclined, get specific about which factors you think will help them perform better (money in hand, connections to money, financial acumen, work ethic) vs. those that might impede them (opportunity cost, lack of technical expertise, money in hand [lack of hunger], business style etc).

Hard for me to handicap w such a limited exposure. At gc i tended to have a bias against bankers/consultants turned entrepreneurs (mostly for personality reasons), but I have seen a number of examples to disprove this bias


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    I’m a NYC based investor and entrepreneur. I think there is one metric that can be used to measure the value of a human life and that’s impact. How did you change things? How many people did you touch? How different is the world because you lived in it and how positive was the change that you affected? (p.s. i don’t use spell check…deal with it) You can email me at Jordan.Cooper@gmail.com

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