Is Wall Street the Best Start-Up Incubator?
It used to be that if you were young and ambitious, you headed to Wall Street. These days, those folks are running in the opposite direction.
In the wake of the financial crisis, loads of young financiers are leaving Wall Street--to strike out as entrepreneurs. Some are seeking more meaningful work; others want to take a risk while young and unencumbered. They are certainly well prepared. Like start-ups, banks are demanding and fiercely competitive. And like entrepreneurs, bankers must be skilled at market research, financial analysis, and working in teams.
The ex-bankers do have at least one major edge: Their big bonuses are a perfect source of seed capital. Below, five Wall Street refugees explain why they changed course and how their i-banking experience is helping them now.
Banking experience: Analyst at Goldman Sachs
Current role: Co-founder of VeeV, maker of an açaí berry liqueur
"I wasn't married and didn't have many financial obligations, so it wasn't as risky as it might have seemed. And it never hurts to know people who have access to capital. All of my angel investors were people I met through working at Goldman."
Banking experience: Quantitative strategist at Goldman Sachs
Current role: Co-founder of HireArt, an online hiring service
"I felt like there was a lot more to me than what I was doing at work. Starting a company sounded exciting and was something I always wanted to try. It wasn't easy to leave a job I had worked so hard to get, but it was now or never."
Banking experience: Intern at Goldman Sachs
Current role: Co-founder of FiveStars, a loyalty-card start-up
"Leaving my job was a religious decision. I'm a Christian, and my long-term goal is to make a big impact on the world. My calling is business, so doing a start-up, and doing it in a wholesome way, was the best way to achieve that."
Banking experience: Analyst at Lazard
Current role: Co-founder of Chubbies Shorts, an online retailer
"It gives you a perspective that other people your age just don't have. You can work two years, get incredible experience, and when you leave, you're still young enough where you can afford to take risks and start your own company."
Banking experience: Quantitative analyst at D.E. Shaw
Current role: CEO of RentHop, an online apartment rental service
"The hedge-fund world trains you to protect capital and manage risk. As an entrepreneur, if you risk everything, you won't be in business for long. That's why we keep our eyes on our finances and grow in a way that's profitable."
Darren Dahl is a contributing editor at Inc. Magazine, which he has written for since 2004. He also works as a collaborative writer and editor and has partnered with several high-profile authors. Dahl lives in Asheville, NC.