The company was founded by David E. Shaw, a former Columbia University faculty member with a doctoral degree from Stanford. D. E. Shaw began investing in June 1989, having secured $28 million in capital from Paloma Partners Management Co. and a couple of private investors. The company's first office was small and located above a bookstore near New York University. By 1990, the company had moved to a loft on Park Avenue South, and it relocated again the following year to Tower 45 on West 45th Street.