5 ms·

I can't afford to. If I could afford to, I would have quietly done it. But real estate in Palo Alto is very expensive, and most of YC's investments are still

by pg 15y ago

I can't afford to. If I could afford to, I would have quietly done it. But real estate in Palo Alto is very expensive, and most of YC's investments are still illiquid. (Not that I have 5-8% in any case. We assume we get diluted down to 2% by exit, and I am one of several partners in YC.)

cdibona 15y ago
It's also not worth it and you'd be rewarding the building owner. Bistro Elan could move two blocks in either direction, reduce rent and recoup moving costs in months. (and I hope they do)
- jackowayed 15y ago
  Yeah, when I saw Paul's post, the first thing I thought was that it would encourage every landlord of a place that a lot of very rich people love to triple the rent and force a rich person to buy it at a favorable price.
  - DilipJ 15y ago
    investing in restaurants is a great way for a rich guy to become a poor guy. One case of food poisoning and you'll be dealing with lawsuits that will force you under. plus it's not scalable, so it's difficult to make a lot of money, unless the food is so good or unique that you can franchise it. But I'm guessing the appeal of Elan has more to do with the atmosphere than the menu... Anyway, it doesn't matter, the reason the landlord is raising the rent is because he/she assumes that there is someone willing to pay more for the space, which indicates that there is a more economically viable operation that can be run in that area than that particular restaurant.
    - vishaldpatel 15y ago
      Business leasing is usually longer-term (often 10 years) and any rent increases are negotiated. The fun starts when the lease is up for renewal: - Landlords can refuse to renew it. I know of cases where the landlord changes and the new landlord decides not to continue the lease. When the business owners leave, the landlord restarts the same business in that location - hires his cousins to run shop. Often the businesses, despite being profitable (a lot of small businesses are just ramen-profitable) can not afford to move out so they leave everything behind. - Landlord wants a lot more rent to reflect market conditions. This increases fixed costs, which make the business harder to run, and much more unattractive to potential buyers. Most landlords want the businesses who rent from them to succeed and try to be reasonable with their demands because they prefer to have a stable cash-flow from their investments.
    - Chico 15y ago
      In the case here you're not really dealing with the restaurants itself, but with the building. You rent your space to the restaurant.
pknerd 15y ago
Loved your honest response,Paul.
lakeeffect 15y ago
I thinking maybe the question was in regards to your willingness to take financing on an undertaking of your own.
lakeeffect 15y ago
Why quietly, i think cash flow generation is a good example to lead.
rdl 15y ago
Of course if you get to the point of investing in 200-300 companies per year, and lots of them do well, prices of PA real estate will get even more expensive.

by pg 15y ago

cdibona 15y ago

It's also not worth it and you'd be rewarding the building owner. Bistro Elan could move two blocks in either direction, reduce rent and recoup moving costs in months. (and I hope they do)

jackowayed 15y ago
Yeah, when I saw Paul's post, the first thing I thought was that it would encourage every landlord of a place that a lot of very rich people love to triple the rent and force a rich person to buy it at a favorable price.
- DilipJ 15y ago
  investing in restaurants is a great way for a rich guy to become a poor guy. One case of food poisoning and you'll be dealing with lawsuits that will force you under. plus it's not scalable, so it's difficult to make a lot of money, unless the food is so good or unique that you can franchise it. But I'm guessing the appeal of Elan has more to do with the atmosphere than the menu... Anyway, it doesn't matter, the reason the landlord is raising the rent is because he/she assumes that there is someone willing to pay more for the space, which indicates that there is a more economically viable operation that can be run in that area than that particular restaurant.
  - vishaldpatel 15y ago
    Business leasing is usually longer-term (often 10 years) and any rent increases are negotiated. The fun starts when the lease is up for renewal: - Landlords can refuse to renew it. I know of cases where the landlord changes and the new landlord decides not to continue the lease. When the business owners leave, the landlord restarts the same business in that location - hires his cousins to run shop. Often the businesses, despite being profitable (a lot of small businesses are just ramen-profitable) can not afford to move out so they leave everything behind. - Landlord wants a lot more rent to reflect market conditions. This increases fixed costs, which make the business harder to run, and much more unattractive to potential buyers. Most landlords want the businesses who rent from them to succeed and try to be reasonable with their demands because they prefer to have a stable cash-flow from their investments.
  - Chico 15y ago
    In the case here you're not really dealing with the restaurants itself, but with the building. You rent your space to the restaurant.

pknerd 15y ago

Loved your honest response,Paul.

lakeeffect 15y ago

I thinking maybe the question was in regards to your willingness to take financing on an undertaking of your own.

lakeeffect 15y ago

Why quietly, i think cash flow generation is a good example to lead.

rdl 15y ago

Of course if you get to the point of investing in 200-300 companies per year, and lots of them do well, prices of PA real estate will get even more expensive.