It’s karaoke Thursday in Silicon Valley, and the song that ought to be playing is Travie McCoy’s “Billionaire.”
After all, the young people gathered at Fred’s Place, a dive bar not far from the Googleplex in Mountain View, California, were fabulously rich. But while McCoy sings of making a hypothetical fortune, this group was born into billions.
They had come from around the globe as part of Big Finance’s latest pitch to the richest of rich kids: you, too, can play in Silicon Valley. Never mind that the Zuckerbergs and Gateses of the world didn’t start out with vast family fortunes behind them—after the last decade’s tech boom, even already loaded millennials want a shot at the next big thing. Private banks, eager to curry favor with the next generation of billionaires, are clamoring to give them an inside edge.
Citi Private Bank, Deutsche Bank, Morgan Stanley and BNP Paribas’s Bank of the West have all started special Silicon Valley programs for the offspring of their most valuable clients, providing exclusive access to startups and tech investors, along, of course, with time to unwind and network at a local watering hole. The trips, branded as “summits” or “experiences,” are crash courses on cutting-edge tech, meant to inspire as much as to inform.
“We’ve found that about one-third of heirs to family businesses want to be entrepreneurs in their own right,” said Money K., head of Next Gen programming for Citi Private Bank, which has hosted two “Frontiers Conference” events in Silicon Valley. “They want to be the next Mark Zuckerberg.”
For the banks, it’s a way to garner loyalty among millennials who may prefer up-and-coming tech to old-guard Wall Street. With the finance industry facing the biggest transfer of wealth in history—93 of the 500 richest people in the world are at least 80 years old, according to the Bloomberg Billionaires Index—money managers are pulling out all the stops to hold their ultra-wealthy clients close.
Tech Talks
The programs are far more involved than the typical Silicon Valley tourist outings that stop at Steve Jobs’s childhood home or Facebook’s thumbs up headquarters sign. The banks partner with startup accelerators and tech think tanks, packing multiday events with talks from founders, CEOs and venture capitalists.
Wealth managers “want to leverage our strong foothold in the Valley with entrepreneurs, with venture capitalists, and use that to expose their clients, especially the kids of the ultra-high net worth, to new means of diversifying,” said Omeed Mehrinfar, who helps oversee corporate partnerships for Plug and Play Tech Center, a startup accelerator that has worked with Deutsche Bank and BNP on their Silicon Valley programs.
Cameron Teitelman, an entrepreneur who stumbled upon the wealthy crew gathered at Fred’s Place after a Deutsche Bank event in October, said he’s “constantly” approached to take part in tech tours. He founded StartX, a community of Stanford-affiliated startups, and has so far turned the requests down—but is starting to reconsider. “Give us the money to pay us to do it, and maybe it’s worth it,” he said.
Many participants in the banks’ events find that it is. The programs are a melting pot of money and innovation, which creates an opportunity for everyone involved.