|Nicole Shariat Farb, a former VP at Goldman Sachs|
Silicon Valley is raiding Wall Street, reports the Wall Street Journal.
Large and small technology companies, from Square Inc. to Rackspace Hosting Inc., with deep pockets and a pressing need to broaden their workforces are snagging top talent from financial firms.
Personal car service Uber Inc. has hired 10% to 15% of its nearly 250 employees from the finance industry and 5% from investment bank Goldman Sachs Group Inc. in particular, says Uber Chief Executive Travis Kalanick. Among the recruits is Gautam Gupta, a Goldman Sachs vice president who joined San Francisco-based Uber in business operations and finance in April.
Mr. Kalanick says the finance industry recruits stellar young people and trains them in skills that are also important to tech companies: managing data and selling to and communicating with customers. "They are the seam between the bits and asphalt," he says, adding Uber employs many former bankers in nonfinance roles like city managers and supply-chain operations.
Talent has flowed between finance and tech for decades, with tech luring more people during booms like the present one. But tech firms and recruiters say the trend is accelerating as the balance of power between the two industries shifts in favor of tech.
For years, Wall Street had the prestige and biggest checkbooks to hire the best young talent and programmers. Now, the tech industry and the wealth around it continue to grow, while compensation on Wall Street has tightened.
That means the tech industry has "a fighting chance to get the best and the brightest from Wall Street," says Martha Josephson, a partner at Egon Zehnder in Palo Alto.
Some younger professionals say finance doesn't offer the same opportunities it used to and that the path to becoming a partner has become longer and less lucrative.
Nicole Shariat Farb, a former vice president at Goldman Sachs, says the tech industry now offers the attributes that drew her to finance: the ability to have an impact and work with smart people. She left Goldman Sachs in March to start soon-to-launch DIY e-commerce company Darby Smart in San Francisco. "In my view, capital is now a commodity and I don't want to be in a commodity industry," she says.
The exodus from Goldman Sachs, long a breeding ground of talent for other industries like government, has been particularly acute. Former Goldman Sachs managing director Scott Stanford, who was involved in the firm's investments in Internet companies like Facebook Inc. and LinkedIn Corp., recently left to launch a new startup investment firm in San Francisco. Scott Hegstrom, one of the firm's managing directors, will join Web-hosting company Rackspace as vice president of business development later this month. Mobile-payments company Square Inc. last year hired Chief Financial Officer Sarah Friar, who spent more than a decade at Goldman Sachs.
But the trend is broader. Kristina Salen, who ran a group of analysts at Fidelity Investments, became chief financial officer of e-commerce site Etsy Inc. earlier this year. Tech companies say hiring from Morgan Stanley and J.P. Morgan Chase & Co. is up too.
Gene Sykes, co-head of Goldman's global M&A practice, says migration to tech is natural as the industry has become more relevant. "Most people come to Goldman Sachs for an extraordinary experience and a great foundation to learn," he says. "We embrace that. It makes us a stronger place."
Representatives of other financial firms declined to comment on the departures or didn't respond to requests for comment.
Tech companies are also trying to compete with finance for talent earlier and on their own turf. In February Sequoia Capital co-hosted a recruiting event for its portfolio companies, including Dropbox Inc., at Princeton University in New Jersey.
Partner Bryan Schreier says Sequoia targeted the East Coast because it has a concentration of schools and is where financial firms have well-honed recruiting machines. He tried to calm the anticipated concerns of some of the 150 students in attendance about the risks of joining a startup with stats like the 2.3% unemployment rate among computer programmers in the U.S.
The students "needed the education and bullets to go back to their parents," he says, adding that several attendees have expressed interest in startups since and the firm is holding a second event in Manhattan in the fall. "These people are oriented around prestige."