Some Grads Pick Entrepreneurship Over Wall Street Paydays

New York, NY —

A day after graduating from Columbia University, Michael Glass, 25, is hunched over a computer in a one-bedroom apartment in Greenpoint, Brooklyn. He’s stressed out. He’s working with two 24-year-old friends, Jonah Bloch-Johnson, who graduated from Columbia two years ago, and Michael Geraci, an Oberlin graduate. The three have been working five and six days a week, rotating between their apartments in Brooklyn, the Bronx, and Washington Heights, trying to meet an important deadline in July.

Glass, Bloch-Johnson and Geraci are building a website that helps consumers track their electricity use and compare different energy plans to see which can reduce their greenhouse gas emissions, energy bills or both. The trio has already raised $20,000 in funding from a group of five New York venture capital firms running a summer program called SeedStart. In exchange for its investment, SeedStart gets a 5 percent stake in the company. "Our next milestone is the end of July," Bloch-Johnson says. "We're going to get to pitch a bunch of venture capitalists. We don't have any plans to support ourselves past that point. Our only plan is to do well that day and to get more funding."

Glass is a minority among this year’s graduating computer science majors. He’s going into business for himself while others head to Wall Street.

The financial industry's return to profitability meant a lot more recruiters on college campuses last fall, dangling big paychecks. Glass says most computer science majors in New York go into finance because it’s the home industry and it’s where recent grads can make a lot of money. “There’s a big brain drain,” he says.

Sarah Lensing (left), 21, and Gauri Manglik, 21, graduated from NYU this year and are working with three others on a website that offers personalized recommendations for restaurants, bars, and clubs.

The group hopes to make money from their website by letting companies advertise on the site, reducify.com, or charging companies each time they connect with new consumers on the site. The site hasn’t gone live yet. Before their meeting with investors, Glass, Bloch-Johnson, and Geraci have to build a computer program that can accurately predict a consumer's electricity bill and create a database of different appliances, from air conditioners to refrigerators and hair dryers, filled with details about their energy efficiency. “It’s very exciting,” Glass says.

It’s also not a sure thing. If the group doesn't get more money this summer, Glass may have to move back home to Atlanta to live with his parents and continue working on the venture from there.

"It's tough. I mean, the number of companies that actually succeed is insanely low," says Owen Davis, who runs NYC Seed, one of the companies that invested in the trio's Web site.

Davis says only 1 percent of all companies seeking venture capital funding get the money they need, and only a third of that 1 percent show any real return. It’s almost impossible to tell which company will be a blockbuster hit. “I don't care if you're the best investor in the world, there's no way to know,” he says. For example, Davis says, if somebody had come to you right after YouTube launched and said, “Hey, we just put up this video site. It’s really ugly, and all it does is it allows people to upload their video files,” you wouldn’t invest.

Gauri Manglik, 21, graduated from New York University this month and, with four friends, she brainstormed some 30 ideas before deciding to build a website and iPhone application that gives you personalized recommendations of new venues to check out. Manglik's site, enjoyn.me, would recommend where you might like to eat, drink and dance, based on the restaurants, bars and clubs you already visit.

Manglik says she believes people her age and generation don’t want to deal with the hassle of sifting through dozens of options. They want someone else to make the choice.

To pursue this venture, Manglik gave up a full-time job at money management firm BlackRock. She says her mother, who's a doctor, doesn't understand this entrepreneurial drive. “Every day she’ll call and be like, ‘I talked to this nurse, or I talked to this doctor, or I talked to this friend of a friend who thinks you’re, like, crazy,’” says Manglik, who acknowledges she doesn’t know many graduating seniors who are starting their own businesses. “Either we’re the smartest or the stupidest,” she says. They’re definitely not typical.

CORRECTION: In an earlier version of this story, and in the broadcast story, we reported that NYC Seed provided $20,000 to the three students building the consumer electricity use website. In fact, NYC Seed is part of a consortium that provided the funding.