Laid-off Wall Streeters find entrepreneurial spirit
A small-business incubator in New York steps up to rival collaborations in Boston and Silicon Valley.
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The city is opening up a small-business incubator just a few subway stops from the financial district. This is where anyone who has a fledgling plan for a small business can apply to set up shop and get off the ground.
What makes the incubator attractive is its low rent – far lower than the cost of most office space in New York City. Also, with multiple endeavors under one roof, the workers can compare notes and feed off one another's energy.
A few perks come with the space, too. The Bill Gates-wannabes will have Bloomberg machines, which provide extensive business data. And the entrepreneurs can get an assist from interns – students from a university.
The city wants the incubator to scale up and up, with the ultimate goal of challenging America's leading entrepreneurial and incubator centers.
"Given the scale of New York and [its] economy, we are hitting below our weight compared to other centers like Boston and Silicon Valley," says Seth Pinsky, president of the city's Economic Development Corp., which is spearheading the effort. "We want to start to carry the weight that is appropriate given the size of the city and our economy."
To get there, the city is spending $15 million over five years. It will also draw on some $30 million in unused 9/11 federal money. Moreover, the city hopes to add some private capital, including $10 million in Angel Funds – money from affluent individuals who want an early equity interest in a promising new business.
"We estimate when this is all said and done, these [efforts] will create 25,000 jobs over 10 years," Mr. Pinsky says.
The city's unemployment rate in May, according to the New York State Department of Labor, was 9 percent – below the national average of 9.4 percent that month. New York City is somewhat better off, Pinsky says, because of its diverse economy and the growth of small companies in financial services. Some of that growth has apparently happened as people who lost jobs at large banks start their own businesses.
Interest in entrepreneurship emerged when some displaced Wall Streeters ended up at outplacement organizations such as Right Management in New York, says Leslie Hild, vice president for career management services. "We have sessions to ‘kick the tires' to see if the idea is interesting, and [participants have] the opportunity to speak to experts in entrepreneurship," she says.
Yet people who end up at outplacement firms tend to have higher incomes. New York's effort to energize entrepreneurial instincts, meanwhile, is geared to those making $20,000 to $70,000 a year. These are people on Wall Street who helped firms process trades or worked as administrative assistants.