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Tales Of The New Gold Rush

Somewhere out there, in a briefcase or laptop or shoulder bag, is an idea that will make a lot of people very rich. Steve Brotman and the city's other venture capitalists will endure any number of preposterous pitches and business plans to find it.


Every day when Steve Brotman goes to the office, he hopes the business plan for the next Yahoo! or Microsoft-killer will be waiting in an envelope on his desk. Unfortunately, today is not that day.

To Whom It May Concern: is much more than just an idea or a concept to me. It is my dream!

Brotman receives at least twenty business plans a week. Usually, they come through the mail, though occasionally they arrive by messenger, FedEx, or -- bip! -- even e-mail, as this one just did.

It's rather ironic that a single guy who's never been married, and comes from a family of parents who have been together for 40 years should come up with an idea like this!

Last weekend, when Brotman came into the office to catch up on some paperwork, he actually slipped on an I-business proposal some guy had shoved under his door.

But I've talked to many people. And have especially seen the effect of divorce on children. (Its quite possible that you are reading this letter and have yourself been effected by divorce!) It's everywhere!

Brotman, an edgy, prematurely graying young man, is laughing now -- cackling, actually -- and the sound of it rattles off the bare walls of his new office, a bunker the size of a magazine kiosk, furnished in what could charitably be described as late-twentieth-century Staples: "This is great." He prints out the business proposal and reads the tag line from the cover sheet aloud: Because with every ending there comes a new beginning. He sticks his finger down his throat. This is personal and confidential. He looks up. "A blast e-mail is personal and confidential?" We are fully aware that our project is in need of more development. "Well, thank goodness." If you would like to see the hard copied version of the plan . . . Brotman throws the pitch on his desk. "This is so weird," he says. "They don't even tell me what they do."

"Anyone with money wants to invest in the Internet. I could pick up the phone -- honestly, this is true -- and in 30 minutes finance a company."

Actually, that's not an uncommon problem with business plans, especially when they're written by kids barely old enough to shave. It doesn't matter. Brotman is still willing to slog through almost every subliterate, bizarre, and undercooked scheme that flies in over the transom -- there's a big Big Deal lurking in those piles.

Silicon Alley these days is a two-ring circus of money chasing ideas and ideas chasing money, and venture capitalist Steve Brotman has placed himself at ground zero of this frenzy. Just about every day, Wall Street types offer him more money than he knows what to do with. For now, he's keeping his fund at $14 million, which seems like small change until you consider that Brotman aims for his investments to increase by a factor of a thousand. And who's to say, given what's been happening in the past few years, that he won't get it?

Brotman and venture capitalists like him have become what Hollywood producers were in the overheated eighties, when every guy who could type was shopping around a screenplay. They're the sifters, the sorters, the gatekeepers, and the truffle hunters, the self-styled visionaries who speak with great authority about what will tank and what will sell.

It wasn't always this way, of course. Once upon a time -- say, five years ago -- New York venture capitalists were an insular, conservative enclave of flinty gray eminences with farms out in Bedford and extensive investments in biotechnology, medical companies, and concerns in Eastern Europe. Alan Patricof, the man who practically invented the warrior art of venture capitalism, at least had the prescience to invest in America Online in 1985 -- and then pulled out in 1992, before he made any real money.

Now Patricof's eldest son runs a venture fund specializing in creating media and entertainment companies on the Net. In 1999, for the first time ever, more people from the graduating class of Harvard Business School became venture capitalists than investment bankers. In fact, the New York venture-capitalism world is already spilling over with kids who tear through money like popcorn and think IPO is an acronym for instant paper opulence. (Or is it I've profited outlandishly? Income painlessly obtained? I've pocketed oodles?). And more are on the way.

"Not a day goes by, literally, when I don't get an e-mail from a soon-to-be business-school graduate looking to get into the business," says Jerry Colonna, co-founder of Flatiron Partners, the highest-profile Internet venture-capital fund in the city. "It's today's equivalent of investment banking."

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