I have no idea why Goldman Sachs (GS) invited me to their first ever South by Southwest party, held on a rooftop. As it turned out, neither did most of the attendees I spoke with. Half of them had no connection to the party’s hosts, which included the Wall Street giant and two venture capital firms. Almost everyone else had sneaked in from another party being thrown in the same building.
It wasn’t tough to play “spot the banker.” Among the typical techie crowd of young founders in startup t-shirts, flip-flops and wayfarers, a small handful of older men–sporting gelled hair, crisp button-ups, expensive blazers, khaki pants and square-toed dress shoes–observed the action like party chaperones.
I approached the first bankerly types I spotted and asked point blank: “Do you guys know why Goldman Sachs would throw a party at South by Southwest?”
They did; turns out I had approached the two people from Goldman who’d organized the event. Their easy smiles turned cold once they spotted the “Press” label on my conference badge. One of them even moved his Oakley sunglasses, which had been hanging around his neck via neck strap, onto his face like a professional poker player trying to hide his thoughts.
Off the record, he told me, Goldman threw the party for some fluffy non-answer reason I cannot write because I agreed to talk off the record. “What’s the on-the-record answer?” I asked. “We never go on the record,” he said.
Left to speculate, I pushed my way through the rooftop, crowded with giant ferns, plush seating and sweaty bodies, until I noticed party swag scattered around on coffee tables. It was too perfect: friendship bracelets.
Goldman Sachs, the $83 billion “vampire squid” investment bank, came to tech geek nirvana to make new friends. Specifically, ascendant-tech-startup-entrepreneurs-who-might-consider-retaining-the-services-of-a-certain-investment-bank-when-they-sell-or-IPO friends.
“People think you have to be a Snapchat or Uber to work with Goldman Sachs. They just want to seem more accessible to earlier-stage companies,” a venture investor in attendance told me. Which makes perfect sense.
Tech startups grow to unicorn size faster than ever. (Take Slack, which took just eight months to hit a $1 billion valuation.) Even Uber and Snapchat, which are worth a respective $41.2 billion and $15 billion, are young companies. The earlier in a startup’s life that a bank like Goldman can buddy up to the next unicorn, the better its odds of being chosen to offer, say, a large debt placement to its high net worth clients (as Goldman recently did with Uber). With startups staying private longer than ever, more investors want to get in on that growth before they go public. The only way to do that is to have a good relationship with the startup. Thus, Goldman Sachs’ friendship bracelets.
I didn’t see many relationships being forged between the bankers and founders in the crowd, but that’s not the point of a party at SXSW. The point is to have a presence. A stake in the ground that says you’re innovative, or at least that you appreciate the innovation of others. This is why the biggest parties at SXSW were thrown by Fortune 500 companies that could hardly count as hot tech startups: McDonald’s (MCD) Samsung (KRX) and yes, Goldman Sachs.
One party-goer complained that he wasn’t able to find anyone from Goldman. It didn’t help that we had to shout over the thumping bass from a DJ mounted in the center of the roof. “Some name tags would help!” he yelled. I suggested he identify the bankers by their wardrobes. That strategy had a 100% hit rate for me.
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