In the sweating-bullets world of venture capital, start-ups live or die by The Pitch — the one-shot better-get-this-right opportunity an entrepreneur has to sell his idea to the people who have the money to make it happen. Barack Obama, the most successful start-up in modern American politics, made his pitch to 20-odd gorilla-league hedge-fund barons and Wall Street money managers early in the Democratic primary season. He wasn’t yet the front runner, and the room wasn’t necessarily ready to be impressed. New York money was already invested in the presidential aspirations of home-state senator Hillary Clinton, and Chuck Schumer, who had been merciless in his campaign to wring money out of Wall Street for the Democratic Senatorial Campaign Committee, was backing her. So were the CEOs of JPMorgan Chase, Goldman Sachs, and Morgan Stanley. Obama’s net assets: one famous speech.
Pitching Wall Street, Obama didn’t chew through his usual mouthful of Hope and Change. This was a room full of George Soros–level players, not the sort of people who get a buzz from inhaling the heady vapors of Obama’s pharmaceutical-grade oratory. Instead of his usual homily, Obama delivered what one insider describes as a “blistering attack” on the American public-school bureaucracy in general and on teachers’ unions in particular. Busting chops — that got Wall Street’s attention. He said he was close — “this close” — to supporting vouchers, an almost unthinkably heterodox position for a Democrat seeking the keys to the executive suite. But hedge-fund guys spend good coin sending their precious bundles to Choate and Greenwich Country Day School, and they like the idea of education reform. Obama must have been convincing: Nearly three-fourths of the hedge-fund and buyout-firm money that found its way into the two major 2008 presidential candidates’ campaigns went to Obama. He’d taken $2,000 from Tony Rezko and a loan from a Chicago Cadillac dealer and turned it into a $750 million political enterprise. Never mind Colin Powell, the Republicans had lost Gordon Gekko, and the Goldman Sachs Democrats were back in business.
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