Goodbye to All That

Wall Street Refugees Join Incubator, Try to Disrupt Their Former Masters

bankingceotestifybeforehouseusetarpfsnyapqxm ul Wall Street Refugees Join Incubator, Try to Disrupt Their Former Masters

Not a fan of start-up fever.

If the tenants at the city’s NYU-Poly incubator are any indicator, Wall Street is soooooo 2006. A number of the 20 tenants working out of 160 Varick Street are now wantrepreneurs who have given up finance salaries–by force or choice–for “fin-tech” start-ups.

These former suits are leveraging what they learned on the Street to create financial products and services that, in theory, their old employers will have to compete with, or buy into.

Crain’s New York points to Michael Chuang, who used to sell bonds and mortgaged-back securities for Lehman and then UBS. In March 2008, he founded iTB Holdings, an online brokerage dealing exclusively with bonds, relying on his parting gift from Wall Street ($3 million in savings) as well as funding from friends, family, and angel investors. He now has five full-time employees at the Varick Street incubator and ten more in Eastern Europe.

Raj Udeshi, a Latin American derivatives broker laid off in late 2008, now operates HiddenLevers, a market analsyses start-up for small investment advisers, along with his three full-time staffers. Mr. Udeshi told Crain’s that “Meritocracy is absolutely dead on Wall Street,” citing his own dismissal while senior, but less productive workers were retained. He says there are no hard feelings, pointing out that his new firm is designed to help the old guard.

With this sector bubbling up (for example: CB Insights, another Varick St. start-up–this one launched by a former Amex business strategist–was one of six local start-ups awarded funding and mentoring through the city’s FinTech Innovation Lab) and another round of layoffs on the horizon, Wall Street might want to be extra careful not to leave future innovators with an ax to grind.

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