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Zed Shaw explained this very well in a post about why there's no real startup culture in NYC (yet): http://zedshaw.com/blog/2010-01-19.html http://zedshaw.com/b

Zed Shaw explained this very well in a post about why there's no real startup culture in NYC (yet): http://zedshaw.com/blog/2010-01-19.html http://zedshaw.com/blog/2010-01-19.html It's true though. The financial industry controls an incredible amount of wealth in New York. I think most people don't really appreciate the scale of it.

tedunangst 16y ago
Yeah, so don't go expecting a handout from BofA. But Wells Fargo isn't raining money on SF startups either. I don't think "Sorry, limit one industry per city" is a valid rule.
yummyfajitas 16y ago
Zed exaggerates wildly. If he was speaking with the manager of a $30 billion hedge fund, he was talking to one of three people: George Soros, John Paulson (yes, the guy on the short side of ABACUS), or Brevan Howard. http://www.pionline.com/article/20100308/CHART2/100309910 http://www.pionline.com/article/20100308/CHART2/100309910 J.P. Morgan asset management (i.e., nearly all the hedge funds J.P. Morgan owns) is only $53 billion.
- illumin8 16y ago
  Yeah, Zed makes a few good points but most of it is totally off base. Venture capital is not a zero-sum game between tech startups and bankers. A person looking to invest in a startup probably already has investments with several funds and just wants to take a bet on something much more risky but with a lot more potential upside. He does make a good point about talent though: Most of the good quants and algo guys are already employed, have years of vesting options, and can probably retire in 10 years if they stay at whatever fund they're working at. The base salaries are 6 figures, and with bonuses and employee stock plans they're probably pulling in closer to a quarter of a million annually, so your chances of recruiting them to a startup to live on top ramen for a few years are slim to none. Sorry, that's just the reality here. I'm sure you can find some fresh-faced college grads a lot easier though.
- shykes 16y ago
  Zed is right about the fundamentals. Wall Street, as a provider of financial products, is cheating. Their returns are artificially higher because of excessive risk-taking, weak regulations and the guarantee of a bailout if anything goes wrong. If all hidden costs were taken into account, Wall Street would be less competitive which would leave more space for healthier financial products.
joubert 16y ago
controls wealth? isn't wealth created?

tedunangst 16y ago

Yeah, so don't go expecting a handout from BofA. But Wells Fargo isn't raining money on SF startups either. I don't think "Sorry, limit one industry per city" is a valid rule.

yummyfajitas 16y ago

Zed exaggerates wildly. If he was speaking with the manager of a $30 billion hedge fund, he was talking to one of three people: George Soros, John Paulson (yes, the guy on the short side of ABACUS), or Brevan Howard. http://www.pionline.com/article/20100308/CHART2/100309910 http://www.pionline.com/article/20100308/CHART2/100309910 J.P. Morgan asset management (i.e., nearly all the hedge funds J.P. Morgan owns) is only $53 billion.

illumin8 16y ago
Yeah, Zed makes a few good points but most of it is totally off base. Venture capital is not a zero-sum game between tech startups and bankers. A person looking to invest in a startup probably already has investments with several funds and just wants to take a bet on something much more risky but with a lot more potential upside. He does make a good point about talent though: Most of the good quants and algo guys are already employed, have years of vesting options, and can probably retire in 10 years if they stay at whatever fund they're working at. The base salaries are 6 figures, and with bonuses and employee stock plans they're probably pulling in closer to a quarter of a million annually, so your chances of recruiting them to a startup to live on top ramen for a few years are slim to none. Sorry, that's just the reality here. I'm sure you can find some fresh-faced college grads a lot easier though.
shykes 16y ago
Zed is right about the fundamentals. Wall Street, as a provider of financial products, is cheating. Their returns are artificially higher because of excessive risk-taking, weak regulations and the guarantee of a bailout if anything goes wrong. If all hidden costs were taken into account, Wall Street would be less competitive which would leave more space for healthier financial products.

joubert 16y ago

controls wealth? isn't wealth created?