Share All sharing options for: Andrew Yang is promising to revitalize America. His nonprofit tried, too, but couldn’t.

Andrew Yang spent six years as an evangelist for how startups could transform American cities, collecting accolades from the White House, delivering TED-style talks, and starring in documentaries.

All of that made him feel terrible.

That’s because, while the award committees might not have known it, Yang, now a Democratic candidate for president, knew that he didn’t really deserve the applause.

“It’s a very hard thing to admit to oneself,” Yang told Recode. He had gotten it wrong.

Yang says today that he quit Venture for America, his attempt to transform cities like Baltimore by spreading the startup gospel, because he realized that startups could never create enough jobs to make up for all those that robots are predicted to displace.

But that’s not the whole story: Yang’s nonprofit is also struggling to reshape the startup ecosystem at any real scale and is falling far short of its original goal to create 100,000 jobs, according to interviews with over a dozen VFA fellows, current and former employees, and former board members. And even as the organization has pivoted away from the jobs goal and more toward fellows’ experiences, almost half of them no longer live in the cities where they were originally placed.

And so Yang’s record at VFA raises questions about whether he is similarly over-prioritizing marketing and setting unrealistic expectations in his presidential campaign.

For instance, Yang himself admits that the milestone of 100,000 jobs at the core of his pitch was not a realistic target. VFA today has not created even 4,000 jobs.

“In order for organizations to have a very high ceiling, you need to set the goal very, very aggressively,” Yang said.

Yang is running for the Democratic nomination not only on his doomsday vision of a automation-driven apocalypse, but also on these years at Venture for America, which places college seniors at startups like Teach for America does in schools. And while VFA fellows deeply admire him personally, he did not manage to build the philanthropic juggernaut to revitalize urban America that he once promised he would.

It might be easy to dismiss VFA as some miniscule project by a joke presidential candidate. But how VFA fared matters because Yang’s candidacy is based on similar marketing and promises — such as Universal Basic Income and “Human-Centered Capitalism” — and on his professed background as a successful entrepreneur. And he is almost certain to qualify for the first presidential debate this month. Another way to look at it: He is actually in the top half of the Democratic field with his consistent 1 percent in national polls.

And perhaps the strongest piece of evidence that he did not fulfill his vision is that he himself has had second thoughts about whether he accomplished enough. “I was getting a lot of credit for Venture for America,” he said, “in a way that actually gave me increased misgivings.”

Andrew Yang wanted to create 100,000 jobs. He’s on pace to fail.

Venture for America is based on a simple idea: Convince ambitious college seniors to work at startups in struggling cities for two years by making entrepreneurship as prestigious and selective as the fanciest jobs on Wall Street.

Perhaps unsurprisingly, hoopla surrounded Yang’s project since the beginning. Established programs like Teach for America had already enshrined the idea of placing Ivy League students in troubled cities, and Yang’s project intentionally latched onto that brand identity — in obvious ways such as the name as well as subtle ways, like the color scheme in its logo.

More broadly, Yang’s idea scratched a lot of different itches. For social-minded progressives — including local governments — VFA brought in bright do-gooders intent on helping rebuild crumbling inner cities. For business-minded reformers, VFA infused startups with better human capital to create jobs of the future. And for resume-building millennials, VFA offered an entry to the business world at places that weren’t tarred by the financial crisis like Goldman Sachs. So it was little surprise that America liked to thump VFA’s chest.

Before even a single fellow had been placed in a single city, the White House invited Yang to be honored by President Obama as a “Champion of Change.” A documentary released a few years later in 2016 and set in Detroit celebrated the startup journey of Yang’s fellows and Yang himself.

But Yang’s work was not to be judged by movie deals. He himself effectively wrote his own rubric for how should be judged: by a number indelibly etched all over the internet.

VFA’s goal was to create 100,000 jobs in some of America’s most under-resourced cities by 2025. That metric was at the core of Yang’s idea, in nearly every piece of messaging dating back to the very first thing he said publicly about Venture for America in 2011: “Introducing Venture for America — How to Create 100,000 Jobs.”

But eight years later, it appears that Yang is on pace to fail.

The goal has all but evaporated from VFA’s messaging, and the nonprofit now says it feels it has so far created 3,500 jobs — and that’s based on how many jobs its partner companies have added since working with a VFA fellow, a highly questionable measuring stick.

How serious Yang was about the 100,000 figure differs depending on who you talk to. To some close to Yang, it was an animating force quite intentionally spelled out in black ink. To others, it was almost intentionally outlandish branding, maybe like the “Yang Gang” meme or the “Math” motto found on his campaign memorabilia.

What is beyond dispute is that, from the beginning, Yang saw Venture for America as an idea with enormous ambition — and had dreams of a movement as big as TFA, which at one point received as many as 58,000 applications in a year. VFA, in contrast, received about 2,500 applications this year.

“It was definitely big,” said one person who spoke with Yang about his idea early on. “It was about, ‘We’re going to change the world. We’re going to turn this country around.’”

But Yang’s nonprofit has grown far more modestly than planned and so far hasn’t been able to figure out how to grow faster and bigger without compromising the nonprofit’s finances, which were constrained by unexpected fundraising challenges. Early advisers to the company describe VFA today as “sub-scale” — affecting the lives of hundreds of people, sure, but hardly fulfilling the dreams of Andrew Yang at the beginning of his tenure.

A movement this was not.

“We realized how difficult it was to scale probably between the third and fourth year,” said one person involved in VFA early on. “We were just like, ‘This thing is growing linearly. It’s not growing exponentially.’”

By the end of Yang’s tenure in 2017, the organization was raising about $5 million a year in donations, which wasn’t bad for a young nonprofit. But Yang was determined to keep the organization based in New York and pursued New York-based national foundations and financial donors, which sources say held VFA back.

“The biggest concern — the reason why it didn’t kind of explode — was it was hard to get fundraising,” said Nathan Jayappa, who oversaw VFA’s finance operation toward the end of Yang’s tenure.

Yang told Recode that part of the reason his organization never achieved true size was because these national donors didn’t prioritize entrepreneurship as much as education.

Despite Yang’s hustle, the idea of VFA’s elite,high-performing students working at startups didn’t pull at donor’s heartstrings. “We weren’t exactly underprivileged kids,” one person close to the organization said.

“If you’re taking white, male Harvard graduates and turning them into a Y Combinator founder, that’s really cool,” another person close to VFA said, “but I don’t think you need my charitable donations to make that happen.”

And so VFA would eventually realize that focusing on the local billionaire who wanted to save a particular city — think Cleveland Cavaliers owner Dan Gilbert in Detroit or Zappos founder Tony Hsieh in Las Vegas — was their very specific big-money meal ticket.

Though Yang’s presidential campaign is powered overwhelmingly by small donors, people close to him say that the Phillips Exeter- and Columbia-educated lawyer has a special touch with the megarich. For instance, he managed to secure a personal introduction to UBS chairman Bob McCann, which led to a $150,000 donation from the giant.

“He got audiences with these billionaires and he was never out of his depth with them,” said one person close to the organization. “It would leave with them walking away, saying, ‘Holy shit, we’ve got a lot of respect for this guy and we got to support him.’”

To some, that upper-crust background spoke to a more fundamental problem: that Yang thought about how to fix inner cities through the prism of these rich guys, rather than listening to what the community wanted. (Still, VFA managed to avoid some of the political challenges faced by Teach for America, which has battled with teachers unions across the country.) Yang’s presidential platform is taking a different approach and tries to focus on underrepresented groups, not the rich.

While Yang was aggressively working the donor circuit, the organization did not, for instance, prioritize having staff on the ground in the cities where fellows worked. That gave fuel to the idea that VFA was a program for outsiders and gentrifiers, especially given that the first fellow classes were heavily white and heavily male.

After Yang’s successor, Amy Nelson, took over, VFA made localization a priority. “For me, it’s incredibly important that our fellowship class includes people who are from the places where we’re placing fellows,” Nelson told Recode.

Josh Ellis, a Las Vegas entrepreneur and a sharp critic of VFA backer Hsieh, said he found groups like Venture for America that partnered with local billionaires to be “not democratic.”

“I don’t trust the people that these billionaires are putting in charge — these tech people,” he said. “You’re telling them what the city is going to be and they have no power to dispute you. You’re allowed to get away with things that actual civic development by city government wouldn’t.”

How a death in Las Vegas shaped Andrew Yang

It was Las Vegas that would present Yang with one of the most daunting leadership challenges of his entire career — and force his nonprofit to grapple with the realities of the world.

In 2012, Yang chose to work with Zappos CEO Tony Hsieh, who had dreams of remaking his hometown into a hotbed for entrepreneurship, and make Vegas one of VFA’s inaugural cities. Hsieh consummated the marriage with a $1 million donation.

But a little over a year into the program, a VFA fellow, an introverted graduate from the University of North Carolina named Ovik Banerjee, jumped from his Town Terrace apartment in downtown Las Vegas and fell to his death. Recode previously reported that Banerjee clashed repeatedly with Hsieh, who declined to comment for this story.

Banerjee’s suicide rocked the tight-knit network of fellows. Yang immediately began calling them, offering consolation and encouraging them to seek mental health services.

Yang called Banerjee’s parents to break the news. He quickly flew to Las Vegas and gathered in a circle with the Vegas fellows at one of their apartments.

“I don’t remember if we said very much,” Jude Stanion, one of the fellows, told Recode. “There were certainly tears. We were very shaken,” recalled Stanion. “Andrew similarly was at a loss for words.

“It didn’t feel like a CEO coming to cover his ass or to smooth away liabilities,” he said. “I could imagine a reaction from someone in his position that was ingenuine, forced, or saying all the correct words. And I almost feel like Andrew was hit harder than the folks of us who were even in Las Vegas. He really beat himself up for what happened.”

In Banerjee’s hometown of Tuscaloosa, Alabama, Yang stood alongside his grieving parents in their living room. Their son, who Yang had personally recruited from UNC, had died on his watch. He felt responsible.

“You’d have to be kind of an asshole to not feel some degree of responsibility,” Yang said.

To this day, Banerjee’s suicide still weighs on the presidential candidate, who calls the incident one of the most meaningful moments in his life.

One person close to Yang said VFA in the early years, before Banerjee’s death, had a “happy-go-lucky” atmosphere. No more. The organization wouldn’t place any new fellows in Las Vegas within a year of Banerjee’s death.

“That was the first major blow to the organization, and I think under Andrew’s leadership, and really a credit to everyone at VFA, they took that crippling event and turned it into something — which was not swept under the rug,” Stanion said.

Yang would emotionally tell its new fellows about Banerjee’s death and his responsibilities as part of its training program going forward.

“This is not simply success or failure,” Yang haltingly said of his work. “This is sometimes the difference between health and tragedy.”

Andrew Yang won super fans. But he didn’t revitalize cities.

When asked about his track record, Yang, an avowed “humanist,” points to these types of stories that show how he touched people’s lives. VFA has tried to refocus its goals away from things like 100,000 jobs and toward improving support for its existing fellows. That, of course, makes VFA easier to defend as a success story.

The connection that Yang forged with fellows is indeed real. He remains an inspirational figure to them, and he even gave some of the first fellows heads-ups that he was going to run for president.

VFA’s first class of fellows offers a window into how the organization both succeeded and fell short. Out of about 800 alumni and current fellows, about 130 of them have founded a company.

Success stories include people like Sara Cullen, who was a senior at Cornell who planned to enter finance until she heard Yang speaking at an info session with free pizza in 2012. She was “blown away” by what she heard.

“You listen to 10 minutes of him speaking and you’re like, ‘I want to do something,’” said Cullen. Instead of being a management consultant, she’s now a founder of a nutrition startup.

But her startup is in Los Angeles, not in New Orleans, where she was based as a fellow. In fact, only 52 percent of the fellows are still in one of VFA’s cities, a number that Yang’s successor, Nelson, said she felt “really good about” even though that means, of course, that 48 percent of fellows left the cities they were supposed to help revitalize. She pointed to cities like Baltimore, Philadelphia, and Detroit, each of which has about 40 to 50 VFA fellows and alumni building up startup ecosystems and creating jobs.

Eileen Lee, Yang’s second in command, said VFA learned to be conscious to not be “the savior figure coming from a tier one city.

“But it’s always been a little bit of a balance from the perspective of the cities and the perspective of the fellows,” she said. “All the cities have baggage and their own stories and a chip on their shoulders. It’s a little more complex than saying, ‘We have talented entrepreneurs who are ready to go.’”

And several fellows — including those in the 48 percent who left — said that starting a company outside of the major markets proved far more challenging than they would have predicted. As Yang discovered, it wasn’t all about a founder’s entrepreneurial know-how. Some cities simply needed more help than an Ivy League graduate could offer.

“We all — especially that first year — went into it with a great amount of naivete about what we could accomplish,” said Billy Schrero, another fellow based in New Orleans who later struggled to start a company there before moving to Chicago. “We all went in with the best of intentions, and then we were met by some harsh realities.”

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