8. The Coming (Potentially, At Least) Entrepreneurial Boom
“It is amazing what you can do if you have money,” Michael Nutter says to appreciative laughs. He continues, now only half-joking: “One day, we might actually have some.” And that, really, has been the city’s problem all along. Philadelphia is wretchedly poor—the most impoverished major city in the nation, with the hardly face-saving exception of Detroit.
But today, Nutter is talking to people with money. Not just white-shoe-law-firm money, but serious money. The kind of money that created Silicon Valley. The kind of money that takes risks, that funds innovation and creates jobs. And Nutter is talking to these people on the 4000 block of Locust Street in West Philadelphia, where one of the nation’s most highly regarded start-up investment firms, First Round Capital, has just opened its new headquarters.
The scene at the grand opening looks like something out of Cupertino or Manhattan’s Silicon Alley: The fabulously wealthy friends and business partners of Josh Kopelman, First Round’s founding partner, mingle with schlumpy but big-brained college kids. There’s Skee-Ball, of course, and a pneumatic tube that begins in the lobby and ends just outside Kopelman’s office. “Drop business plan here,” reads a faux-vintage sign affixed to the tube.
There’s been no shortage of brilliant business plans drafted in Philadelphia. Between Penn, Drexel and Temple, Philadelphia is a bit of an entrepreneurial factory, full of students dreaming up novel (and sometimes even profitable) businesses. The problem is that few of those entrepreneurs stay in Philly after getting their diplomas. Most decamp immediately for California, New York, Boston, or other destinations where the venture-capital pockets are deeper and the start-up culture is strong.
But that dynamic could be changing. As the city’s appeal to millennials grows stronger, so does Philadelphia’s tech community. At the same time, City Hall is bending over backward to make the tax structure more inviting to entrepreneurs, giving big breaks to venture-capital firms and phasing in a reformed business tax that’s far more favorable to small businesses.
The best evidence that any of this is making a difference is First Round’s decision to plant its flag a few blocks west of Wharton. “There’s never been a better time to start a company in Philly than today,” Kopelman says at the grand opening. And he seems to really mean it. First Round’s new headquarters has desks for “drop-in” entrepreneurs as well as office space for four First Round-funded start-ups and Technically Philly.
All of this in a renovated warehouse done up in industrial-tech chic, wedged between the newly opened Ramen Bar and a high-performance bicycle shop. Naturally, on the curb directly outside, there’s a parklet.