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When Vinicius Vacanti set out to make a pitch for a local deals startup to investors, he figured he understood the process, given his four years on Wall Street.

But minutes into his first meeting with a venture capitalist, Vacanti realized he would be rejected. The investor quickly pointed out the flaws, including the site’s lack of users. As Vacanti rode the bus back to New York from Boston, he considered scrapping the project and starting over.

“The skills you build on Wall Street don’t correlate to a startup,” said Vacanti, 31, a founder of the daily deal aggregator Yipit, who previously worked at private-equity firms Blackstone Group and the Quadrangle Group. While some of those skills are useful, he said, “a couple of those are actually bad.”

As more financiers jump to the technology sector, some are finding that their background, typically considered an asset in the corporate world, can be a liability. Some do not know how to write computer code. Others are ill-prepared for the penny-pinching and frustration of startup life. In short, they have trouble convincing the Silicon Valley establishment that they have what it takes to nurture a young company.

“We start a little skeptical of someone from a finance background,” said Eric Paley of Founder Collective, the investor who declined to back Vacanti’s original idea. “It’s the lack of having to create something for a customer, find the market opportunity and persevere through it with very, very low economics.”

The challenge has become particularly acute as big investors become more discerning with their money. While the technology scene has boomed in recent years, venture capitalists are showing signs of pulling back, especially after the struggles of Facebook, Groupon, Zynga and other former Internet darlings.

Last year, venture capitalists invested $1.78 billion in 302 deals in New York City. That compares with $2.27 billion in 317 deals in 2011, according to PricewaterhouseCoopers and the National Venture Capital Association, which use Thomson Reuters data.

“There’s definitely fewer dollars available” for young companies that need an additional round of financing, said David Pakman, a New York-based partner at venture-capital firm Venrock. “Capital is tight and getting tighter.”

Lure of startups

For young Wall Street professionals contemplating a bleak job market, the lure of working at a startup — with its cachet and prospects for riches — can be powerful. But many financiers are finding it difficult to make the switch.

When Evan Rose left his job at hedge fund Dynamic Capital Management to start an online night-life service, he did not know how to write code. At first, he tried to outsource the programming for the site to Web developers in India. But he had to throw out the final product.

“It was pretty much gobbledygook,” said Rose, 25.

After that, he started from scratch, learning to write code using Google and online forums. It took him a year to create the finished product.

When he eventually took the project to investors, he was excited about the idea, which he called an “OpenTable for night life.” But the site, NiteFly, had a chilly reception.

“Although to him it was a novel concept, we’d heard it before,” said Kyle Widrick, a venture capitalist at Burch Creative Capital who heard the pitch.

To be taken seriously, Rose realized that he would need a deeper knowledge of the intended industry. So he abandoned NiteFly to work on a different startup, eCruit, which aims to connect corporate recruiters to college students through online video conferences.

He worked with a human-resources employee at a big bank, who used his contacts to attract recruiters to the service. With a seed investment from Ted Dintersmith, a partner emeritus at Charles River Ventures, eCruit is planning its inaugural recruiting sessions for this year.

Mentor programs

Some first-time entrepreneurs turn to mentorship programs like Y Combinator and TechStars to gain experience and tap into sources of financing.

Olga Vidisheva, the founder of online fashion company Shoptiques, had a classic Wall Street background when she entered Y Combinator, having spent two years at Goldman Sachs before going to Harvard Business School. Two of her earliest investors were friends from Goldman, and her first employee came from buyout firm Providence Equity Partners.

With no technical background, Vidisheva, 27, used the opportunity at Y Combinator to find a programmer. After the three-month-long program, she also ended up raising $2 million from prominent venture-capital firms like Andreessen Horowitz, Greylock Partners and Benchmark Capital.

Only a handful of “Wall Street refugees” have gone through Y Combinator, said Paul Graham, a founder of the incubator, adding that the number of applicants from finance has been growing in the past couple of years.

“What we like about them is they tend to be pretty fierce,” Graham said. “You can point them at any problem, and if they don’t know how to solve it, they’ll figure out how to solve it and then solve it.”

Write a blog

Keenly aware of the challenges of startup life, Vacanti, of Yipit, now writes a blog chronicling his experiences and sometimes speaks at gatherings for young professionals considering a similar path. After the disappointing meeting in 2010, Vacanti took the investor’s advice to heart and decided to “pivot,” in tech parlance, moving from offering local discounts to aggregating daily deals from sites like Groupon. In 2010, Yipit raised $1.3 million from investors; in 2011, it raised $6 million.

Last March, in response to one of Vacanti’s blog posts, Paley commented on their meeting.

“Glad I could help,” Paley wrote on Twitter. “Should have invested in the pivot!”