NYC vs Silicon Valley

New York will succeed as a startup hub if the rents come down fast enough. Right now, they're still too high; you pretty much have to work a Wall Street job or be parentally supported to live here, and this is a problem.

The bigger problem is that Hedge Funds develop an expensive lifestyle. Expensive lifestyles are hard to change.

Not true, you can find cheap places to live, if you're willing to live outside Manhattan. Jersey City, Queens, BK, are all viable options for the scrappy founder.

VCs/Angels in NYC(northeast as well) are just not in the same investing environment as the West Coast. And it's solely because this area is just not as mature as there. There are the investors that are smart and are willing to take the risks (Founder's Collective, USV, FRC, Flybridge etc.), but the problem is that they are few and far between relative to earlystage VCs and angels on the west coast. Therefore, because they're smart, have branding and don't have serious competition, they DON'T have to take the risk. And why would they, who would blame them? They can wait until the company is almost completely de-risked before they move in. (I guess an argument here is that it's a good thing that the early stage investing industry is small and less risky here. If they succeed more will come.)

The other investors here (the wall streeters turned VCS) just don't get it. They're not investing, as you say, in "change the world" ideas. They're investing in stuff that can make money right away, which is probably why they ask about pricing prematurely.

NYC is frustrating in this respect, and it's easy to see why you're thinking about the West Coast. They're just way more intelligent, early-stage investors. That's changing though, I believe. It just sucks to be a startup in this sort of purgatory. The more Ron Conway's that come to the east the better!

Entry-level hedge fund salaries are similar to technology salaries, and perhaps a little bit lower. Bonuses are very high, but these vary from year to year and shouldn't be taken for granted (not to say that people don't).

I made this change. I'm 26 and have no kids. My girlfriend's in school but will be able to support both of us when she's out. It's mildly annoying not to have a maid and nice vacations right now, but working on interesting problems is more important than having those comforts, which are disposable for now (you don't need help until you have kids, really). Then again, I can also still afford basic necessities; if I couldn't, I'd have to go back to Wall Street.

The major problem in New York is that rent is ridiculous. Most "lifestyle" factors (vacations, alcohol) are flexible and can be deferred for a few years, but rent is non-negotiable. If it stays this high, the city will bleed talent too fast to reach "critical mass". You want the freshly unemployed quants (although quants are among the last to be let go) to stick around in the city for 6 months, not move back in with their parents because of New York rent.

Regarding lifestyle expenses, any guess as to where top traders spend most of their leisure income? Gambling. I never thought I'd meet people smarter than me who find "games" like Roulette and Craps to be interesting and worth playing (because I'm a game designer and a Euro-snob who'd rather play Tigris than Poker) but I have. This is because it's visceral and not intellectual-- people with the "gambling gene" make great traders but I wouldn't want one as a co-founder (long digression omitted).

I'm going to bet on the Midwest as the startup hub of the 2010s. There are a lot of brilliant graduates of schools like Chicago, Northwestern, Carleton, Michigan, and Grinnell whose graduates (for geographic reasons) are not nearly as likely to go to Wall Street (or Silicon Valley) as their coastal counterparts. Most of them go into graduate school, seeing that as the best option for them, because often it is. Wall Street under-recruits the Midwest, and there aren't a lot of cutting-edge companies out there-- yet. If you want to hire talent on the cheap, buy a set of winter clothes and head out to the Great Lakes region.