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I'm beginning to wonder if you could make an incubator that also has real estate holdings where you sell and rent houses to people in Silicon Valley and also fu
by zitterbewegung 9y ago
I'm beginning to wonder if you could make an incubator that also has real estate holdings where you sell and rent houses to people in Silicon Valley and also fund startups. The houses that you have on hand or want to rent you would provide for startups (basically dormitories). The houses in SV would be a hedge on the Startups that you are funding because by bringing in jobs you would also increase the housing prices.
- mamon 9y agoSo, you want to be like Erlich Bachman from "Silicon Valley" sitcom? :) Once upon a time comedy was just for fun, now, if you are screenwriter for a sitcom you have to be carefull because someone, somewhere will take your foolish ideas seriously... Honestly, we need more "Don't try this at home" warnings.
- aaronblohowiak 9y agoThere are several “hacker houses” on the peninsula already — that show is more of a documentary than many people realize
- zitterbewegung 9y agoI don't have HBO it seems like I should for some reason... I keep on having ideas that are on the show.
- andrewmcwatters 9y agoIt would probably be the other way around: an REO firm that made investments in startups.
- meritt 9y agoThis has been happening for the past decade. Why do you think so many VC/PE firms and incubators have a hard requirement of people relocating to SF/SV? You'll also find that many investors will very strongly encourage your startup to utilize technology choices (e.g. MongoDB or Docker) that happen to be part of their investment circle.
- gnicholas 9y agoYou're suggesting that an individual VC partner requires relocation because it will increase the value of his home? I doubt the effect would be strong enough, especially because the type of homes that VC partners live in ($5M-25M) are in a somewhat different market than the homes that VC-backed startup employees would purchase/rent. I would think that relocation requirements would be primarily motivated by factors related to the value of being in SV for networking and other purposes.
- meritt 9y agoTheir individual homes? Not at all. They invest in companies that build, sell, and lease single-family, multi-family, and commercial real estate in the SF/SV area.
- gnicholas 9y agoI'm not familiar with this—how common is this type of investment among VCs? I assume not all VCs have investments in this area, and it would be interesting to see whether the firms that do invest in this area correlate with the firms that require relocation.
- adventured 9y agoThat prompted me to recall Carl Berg from the prior era of the 1980s and 1990s tech boom. He ended up with a lot of stray equity holdings as a consequence of his real-estate position in Silicon Valley. https://www.forbes.com/forbes/1998/1012/6208086a.html https://www.forbes.com/forbes/1998/1012/6208086a.html
- sedachv 9y ago> That prompted me to recall Carl Berg from the prior era of the 1980s and 1990s tech boom. Minor point: those were two tech booms, a 1980s one and a 1990s one, separated by the recession of the early 1990s. I was not around, but period books describe the early 1990s recession as impacting the technology sector fairly seriously.
- noobhacker 9y agoMaybe I'm using the wrong terminology, but isn't a "hedge" something you do to reduce the risk / variance of your investment? If the start-up scene tanked, both your house and your incubator would do less well. Therefore, both markets are correlated and do the opposite of reducing risk.
- beamatronic 9y agoThis exists but is not publically flaunted/advertised.
- DrScump 9y ago... because it's illegal to flout fair-housing regulations.
- callalex 9y agoThis idea sounds dangerously close to a company town, which is fairly universally regarded as a terrible idea. https://en.m.wikipedia.org/wiki/Company_town https://en.m.wikipedia.org/wiki/Company_town
- maxerickson 9y agoHousing subsidies and allowances are pretty common though.