Andrew Yang promised to create 100,000 jobs. He ended up with 150.
NEW YORK — The idea was as simple as it was ambitious: help struggling U.S. cities by recruiting promising college graduates, finding them jobs at startups in those cities and training them to open businesses of their own.
That plan formed the backbone of Venture for America, a nonprofit organization founded in 2011 by Andrew Yang, who waged an improbably durable campaign for president last year and now has surged to the front of the pack in this year’s race for New York City mayor.
Yang has undeniable star power, helping to fuel his rise as a political newcomer with big ideas and boundless optimism about the future of the city. Unlike most of his opponents, he has not worked in government or managed any large organization. Indeed, the most extensive leadership experience of his life was at the helm of Venture for America.
With the zeal of an evangelist, Yang raised tens of millions of dollars for the organization, with the goal of creating 100,000 jobs in cities where they were most needed, such as Detroit. The aim led the Obama administration to declare Yang a “Champion of Change” and paved the way for his political career.
But a review by The New York Times of Yang’s tenure at Venture for America found a yawning gap between his bold promises and the results of his efforts.
Only a small fraction of the group’s alumni have started companies, and most of those businesses have either closed or moved to traditional startup hubs like Silicon Valley. Today, only about 150 people work at companies founded by alumni in the cities that the nonprofit has targeted.
A self-described “numbers guy,” Yang left the group’s budget depleted, tax filings show. In 2017, when he left to run for president, the nonprofit spent $2.6 million more than it raised, ending the year with only about a month’s worth of cash in reserves.
Yang also failed to recruit many participants of color, even creating a points system for applicants that ended up hurting graduates of historically Black colleges, records show.
This uneven record threatens to undermine Yang’s main campaign pitch: that he is an enterprising problem-solver who can lead the largest city in the United States into its recovery from the coronavirus pandemic.
“Andrew comes up with these grand ideas, and he loves to obsess about them and talk about how great they are, but he doesn’t think through all the details,” said Cris Landa, a Venture for America employee between 2016 and last year. She said the nonprofit had an important mission and a talented staff, but Yang did not lead successfully. “He couldn’t be bothered to actually focus on the details.”
For this article, the Times interviewed more than 50 Venture for America alumni and former employees. Many praised the organization for creating opportunities for aspiring entrepreneurs. But nearly two dozen said that despite noble intentions, the program was misguided and ineffective.
In a statement, a campaign spokesperson defended Venture for America and emphasized that Yang had experience running a company — managing a small but successful test-prep firm he had joined as an instructor.
“Andrew was the CEO of a successful private company that became #1 in the country in its category and was acquired by a public company in 2009,” said spokesperson Alyssa Cass. “He then started a nonprofit that helped create jobs around the country and a presidential campaign that grew from nothing to a national movement. He also wrote a New York Times bestseller on the impact of technology on the economy.”
Venture for America, which is still in operation without Yang, declined to comment.
NO TECH, LITTLE ENTREPRENEURSHIP
Still, it is Yang who has led the polls, casting himself as a big-thinking candidate who is willing to experiment with unconventional proposals and build coalitions and relationships, including in the private sector, as he did at Venture for America.
Yang, 46, graduated from Columbia Law School in 1999 and briefly worked as a corporate lawyer in New York. He quit after five months.
In 2000, Yang started a website called Stargiving that sought to use time with celebrities as an incentive for people to donate to charities. That project “failed spectacularly,” as he wrote in his first book.
A year later, Yang started Ignition NYC, which hosted parties for professionals seeking to have fun and make business connections. It flamed out after about a dozen parties, according to a co-founder.
Yang bounced between jobs before landing at the test-prep company, then called Manhattan GMAT, referring to the exam for business school. The founder was a former roommate of one of Yang’s high school friends, and asked Yang to run the business.
Yang ran the company for about four years and helped oversee a sale to Kaplan, the test-prep giant, which netted him a little more than $1 million, former employees said.
On the campaign trail, Yang talks often about that experience. But he played a much larger role in founding and leading Venture for America.
A NEW IDEA
Yang used $121,000 to start Venture for America in 2011, records show. He has said he developed the idea after seeing many students at the test-prep company go into finance or consulting, even as they said they wanted to change the world and nascent companies badly wanted their help.
“There’s a supply and a demand. We just need to connect the two sides,” he wrote in a letter announcing the group, which he said would resemble Teach for America, the nonprofit that recruits graduates to teach in low-income schools.
“Our stated goal is to generate 100,000 U.S. jobs by 2025,” he wrote.
The idea drew widespread attention from the news media, including the Times, and donations poured in — mostly from big banks, including UBS and Barclays, as well as from Dan Gilbert, head of Quicken Loans, and Tony Hsieh, founder of Zappos, the online shoe retailer.
In 2012, Venture for America selected its first class, 31 men and nine women.
The group trained them at a monthlong boot camp at Yang’s undergraduate alma mater, Brown University, and then helped them apply to work for two years as fellows at startups in Cincinnati, Detroit, Las Vegas, New Orleans and Providence, Rhode Island.
The startups paid the fellows up to $38,000 a year and gave $5,000 to the nonprofit. Many companies jumped at the chance to land top talent at a bargain rate. Venture for America encouraged fellows to come up with their own business ideas, offering to help them find funding.
Soon, Venture for America began recruiting much larger classes of fellows and expanding to more cities as Yang raised more money — and made increasingly large declarations about the success of the program.
While leading Venture for America, Yang ultimately told donors the organization had already created as many as 5,000 jobs. While running for president, when critics questioned the claims of success, he said it had created thousands of jobs.
But those numbers were based on an unusual calculation, according to former employees: If the nonprofit sent a fellow to work at a startup and that startup later increased in size, then Yang claimed those new positions as “jobs created.”
Cass, the spokesperson for the Yang campaign, acknowledged that method, adding that the group also counted the jobs filled by the fellows themselves.
In the years since Yang left Venture for America, it has shifted away from declarations about jobs and the 100,000-job goal altogether. Recently, it changed its website to say fellows had started companies that together created almost 450 jobs.
For its analysis, the Times obtained a list of all current and past fellows, analyzed their profiles on LinkedIn and contacted everyone who said they had founded a company. In cases where founders did not respond, reporters obtained information about companies.
The review found that of the nearly 1,000 alumni, about 200 said they had started businesses. But about half of those ventures quickly failed, which is not uncommon among startups. Many of the others have no employees other than their founders. And most of those that have survived have moved away from the cities where they began.
In the cities Venture for America has targeted, there are only about two dozen businesses still in operation, collectively employing about 150 people. Cass, the campaign spokesperson, said Yang was proud of all jobs created, regardless of where they ended up.