Damon Dash stands on New York City's Lower East Side and shivers. It's the first wintry night in November, and the 42-year-old former hip-hop mogul, with gray chin stubble and a low-riding cap—the man who cofounded Roc-A-Fella Records with then-best friend Jay-Z—jams a fist into his pocket and braces against the wind.

"This is reality-show drama," says Dash, kicking the gummy sidewalk as he checks his iPhone. He's come from the basement of the Mercury Lounge, where Jim Jones, the rapper he is promoting later tonight, is holed up between the boiler and some empty beer crates. Surrounded by a dozen or so hangers-on and wreathed in a cloud of pot smoke, Jones is trying hard to learn the lyrics of his own songs. The drummer Dash hired has no cymbals and is racing around the city to find a set. Dash's showcase is starting to look like amateur hour. "Shit is wack," he says.

But shit wasn't always this wack. At the height of his power, Dash presided over a cultural empire without peer. He jump-started Jay-Z's career from the trunk of his car, selling the rapper's discs when no one would sign him. Together with a third partner, Kareem "Biggs" Burke, they launched Roc-A-Fella in 1995, released Jay's seminal first album, Reasonable Doubt, in 1996, and produced nine No. 1 albums together. Dash also discovered Kanye West, Cam'ron, and Beanie Sigel. And he built his brainchild Rocawear into a fashion brand that brought in a reported $400 million a year in revenue.

Yet to many, Damon Dash will always be the man left behind, the Steve Wozniak to Jay-Z's Steve Jobs. When Dash and Jay split in 2004—after two years of clashing egos—Hova moved up the corporate ladder to be president of Def Jam and took Roc-A-Fella Records with him. A year later he bought Dash's share of Rocawear.

Dash didn't seem to care. With the multi-million-dollar checks from those buyouts—$3 million–plus for Roc-A-Fella, $7 million for Rocawear—he had money to burn, and burn it he did: on private chefs and jets, butlers and bodyguards; two lofts in Tribeca, a mansion in Beverly Hills, a $35,000-a-month London apartment, and a $400,000 Maybach. But then shit really did get wack. And amid a series of high-profile repossessions, foreclosures, liens, and press hits that have painted him as a pauper, Dash has tried to rebrand himself as a downtown hipster—a Warhol in baggy jeans running a Lower East Side art collective. Although Dash has shown flashes of his old touch—showcasing indie bands like Sleigh Bells and connecting pals like Mos Def with alt-rock darlings the Black Keys—he has presided over a series of record labels, clothing lines, Internet start-ups, vodkas, movies, sneaker brands, watches, and, inexplicably, motor oils, most of which have failed to take flight.

"We've been in a recession," Dash says by way of explanation. "These things don't crack overnight." Even as some of his businesses have limped along, he seems content to keep pumping funds into them until something—or many things—works. "I don't respect anyone who does not give up their own money," he says. "I don't give a fuck how much money someone else gave you to watch. That's not the game I play."

Dash isn't down-and-out, but he's not exactly living it up. He's made the commute to tonight's show from Greenpoint, Brooklyn, where he's been crashing with a friend (a few weeks later, Dash was reportedly staying in a rental building on the Lower East Side). He's here to shoot a "video look book" for Vampire Life, the clothing line he co-owns with Jones. The idea is to get Jones to change into different outfits between songs during his set and to post video to the line's website, while presenting fans, who will be given merch to wear for the shoot, a live performance.

Coming in from the cold, Dash enters the bar and seeks out Justin Korkidis, his marketing director, part of a six-person staff that Dash relies on to design clothes, bring in street artists, film his every move, and generally hang out with him. Mostly twentysomethings, they are part of his Poppington collective, his multimedia art, fashion, and branding machine. Korkidis, sporting a knit cap, looks beleaguered.

"So what'd they say about our drink tickets?" Dash asks.

"That it has to be worked out," Korkidis says. "But it's half-price. I don't know if you want half-price?"

"Damn, that's crazy," Dash says. "We don't get no drink tickets?!"

Korkidis walks away, sulking.

"The people here are bullshit," Dash calls after him, raising his voice so the bartender can hear. "You ask or you don't get it. Tell them to get us some drink tickets. Get us some beers. Get it flowing!"

• • •

A man is sitting on a boat in the Caribbean, surrounded by bikini-clad women with substantial, sun-kissed breasts—and drinking champagne. That man is Damon Dash. It was a prophetic introduction to the then-24-year-old rising impresario, partying on a speedboat as Jay-Z rapped. It was a scene in Jay's 1995 breakout video, "In My Lifetime," an expression of the urban aspiration for riches and luxury that the two would embody and sell to millions of eager fans.

Like so many of Dash's genius strokes, the video was pure hustle, a fake-it-till-you-make-it fantasy—because neither he nor Jay had those things, not yet. Dash made the video for $16,000, borrowing a friend's boat and creating an ersatz playa's paradise of sun, Cristal, and G-string-clad babes on the island of St. Thomas. But it wasn't surprising coming from Dash, who had grown up moving between the make-your-own-way world of the inner city and the halls of privilege.

"I came from the streets, and you got to hustle in the streets," says Dash, who grew up in East Harlem. "That's why I always have a chip on my shoulder. No one ever gave me anything." His mother, a secretary who sold clothes as a sideline out of their apartment, died of an asthma attack when Dash was 15. His father (his parents divorced when he was 3) ran a methadone clinic. Hyperverbal, quick-witted, and sometimes a handful, Dash bounced between public and private schools. At one point, he earned himself a ticket to the South Kent boarding school in Connecticut, known as a fix-it destination for boys with behavioral issues and for attracting wealthy foreign kids. "I'm one of those guys who has two very concrete experiences," he says. "One was the authentic experience in the street, and the other was boarding school and people from different cultures. So just like Jay, I'm able to articulate my experiences."

When Dash was 18, he and his crew, calling themselves the Best Out, began throwing huge parties each month at the Cotton Club in Harlem. They hired the DJ-rapper Kid Capri and attracted thousands of people, including rappers and pro athletes. His big business idea: giving away free bottles of Moët & Chandon to the first 100 women through the door and creating limited-edition T-shirts commemorating each event. "People wanted to buy those shirts for $300 to $500," Dash says. "I was learning about how to make a brand." In 1990, his cousin Darien Dash, whose stepfather worked in A&R, got them into a party for Heavy D. The crowd was older and, to the street-savvy Dash, beyond its prime. "All these guys were making all this money and they looked weak," he says. "They looked like prey to me. I felt like I could get into this industry and take it."