Countering West Coast Pull, by Helping Finance Start-Ups Sell in New York

08.06.2017 - New York

Written by Randall Smith, New York Times

When Jeff Bezos, then a New York hedge fund employee, decided to start Amazon in 1994, he quickly moved to the West Coast. So did Mark Zuckerberg, who moved from Harvard to California in 2004 to find the technology talent and financing needed to build up Facebook.

Today, the West Coast exerts a similar tidal pull for start-up companies in finance. Nine of the 15 United States financial technology “unicorns” — companies worth $1 billion or more, as tracked by CB Insights — are in the San Francisco area. These Bay Area companies, which are not public, include the online payments processor Stripe, the online lender Social Finance and the finance website Credit Karma.

For the last seven years, a New York business-backed program — the FinTech Innovation Lab — has been working to stem that West Coast tide by helping financial services start-ups sell their services in New York in an industry where the city clearly dominates: big banks and other finance companies.

The program’s backers include Henry Kravis, a co-chief executive of the private equity firm Kohlberg Kravis Roberts; Fred Wilson, a co-founder of the venture capital firm Union Square Ventures; and James D. Robinson III, a former chief executive of American Express.

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