For financial analysts slogging away for long hours, an escape plan becomes enticing; entrepreneurship looks like a seductive dive into uncertainty after endless scrolls of spreadsheets.
Often, these unfulfilled financiers find their ways to careers in fashion.
“If you spend a lot of time in finance, you eventually want something radically different,” said Diana Melencio, co-founder of the personal shopping service Quinn, who had worked for nine years on Wall Street at a handful of investment banking firms before starting her company. “My days had consisted of 12 to 18 hours of spreadsheets, and I wanted something … not like that. It comes from a desire to innovate, to be a part of the fashion industry, which couldn’t be more different than this sterile environment.”
Wall Street, from heavyweights like Goldman Sachs and JPMorgan down to boutique firms, is a vessel for fashion startups. These former analysts-turned-founders can build financial models for new companies in their sleep and talk the same language as potential VC investors. And, after years of analytics and data sheets, left-brained people in the field are looking for creative outlets. The frustration and lack of stimulation, combined with a close proximity to the industry, leads to idea light bulbs.
“We very frequently see analysts coming off of two to three years in finance,” said Pano Anthos, managing director of startup accelerator XRC Labs. “These are very sharp people, with analytical and accounting skills. They’re weaker in terms of fashion experience, but they have a huge interest. They’ll come up with something — usually a product or service, not hardcore tech — that fulfills a need they recognized.”
Young brands like Quinn, performance wear brand Aday, leather goods startup Minku, and Ammara, a direct-to-consumer clothing brand selling just blouses for women, are just a few fashion brands led by ex–Wall Streeters. Each company’s founders said they felt years in finance left them with a particular skill set prime for entrepreneurship: a dogged ability to work long hours, an analytical mind, an eye for performance projections and metrics, and a sharp attention to small details.
“To start a business, you have to be able to take risks, [keep going] in the face of failure and keep think about innovating the product and improving the process,” said founder Ammara Yaqub. “Finance is an industry where risks and rewards are quick and quantifiable, and failed deals are a part of daily business. These were key lessons for me when I started my business.”
Why fashion, though? The consensus: It presents itself as a sexy but complicated industry ripe for new ideas, and is a space that people are passionate about.
Melencio said the idea for Quinn came about because she never had time to shop for herself when working long days on Wall Street. Growing tired of her career in finance, she sat down for drinks with her friend, former Googler John Orekunrin, and the two spent an evening brainstorming ideas for a new project that would give them a reason to up and leave their jobs. Out of that meeting came OKMyOutfit, a styling app that eventually evolved into Quinn. Melencio left her position at Cramer, Rosenthal and McGlynn two weeks later. Today, Quinn counts startup founders, anchors and partners at Goldman Sachs — her former people — as clients.
“There are a lot of former finance people who founded fashion companies because it fills the creative desire to work in a field like fashion,” said Anthos. “They also can approach the industry from a profitability and business perspective that more creative, idea-minded people don’t have.”
Typically, financial founders looking to get a start in fashion seek out a partner with a background in the industry to round out the team. Nina Faulhaber and Meg He, however, launched their performance wear brand Aday in 2015 after putting in long workweeks together on the same analyst team at Goldman Sachs. They both wanted to start a clothing brand that reflected their “less is more” lifestyle, but weren’t sure how they would complement each other with such similar backgrounds.
“We are both left- and right-brained, and the one thing we aspired to do was balance the two,” said Faulhaber. “We’ve learned, since then, how to balance each other out, but the best part is that we’d already put in the 2 a.m. nights at the office at Goldman. That’s the first hurdle.”
When these founders approach venture capitalists, they may speak their language, but their lack of experience still speaks louder.
“Investors may not trust them,” said Anthos. “They’ll trust Tamara Mellon with a shoe startup. Everyone else will be viewed with suspicion. The math in the model may be correct, but that doesn’t answer if the idea is good and if there’s a need for it.”
It can still serve to give founders in the fashion industry, particularly women, a leg up. They’re already underdogs in the VC world.
“As a female founder of a fashion tech company, I’ll lead with my Wall Street background because it helps elevate it,” said Melencio. “When you speak in front of male investors, they just think, ‘Oh, here’s another woman with a fashion company.’ You need to use any form of credibility to your advantage.”