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It seems hard to believe that a company’s managers would want to do their landlords a favor by paying more rent when they don’t have to. How would investors eve

It seems hard to believe that a company’s managers would want to do their landlords a favor by paying more rent when they don’t have to. How would investors even ask for that?

coffeebeqn 3y ago
The theory was that they are also the landlords
adastra22 3y ago
I hear you’re looking to raise another round. It’d be a real shame if a board member got in the way of that.
mschuster91 3y ago
"We happen to have some cheap rental space near other companies we own, no credit checks, and you're near <insert other SaaS companies that can be used so you have close accss to them>" If you're a startup, getting office space without much bullshit is worth a premium.
danjac 3y ago
Where else are the investors investing?
foepys 3y ago
> How would investors even ask for that? What do you mean "ask"? They demand because it's their capital that fuels the company. It's not like a VC gives money to a company and then cannot do anything but wait for returns.
choeger 3y ago
Investors are the landlords, if indirectly. To be honest, I always wondered how much of the venture capital would turn into revenue for other investments. Assume, you own Microsoft stock and are a venture capitalist. How do you react to your latest investment considering to buy AWS vs. Azure? The same pattern might apply in many more direct forms. Where does that fruit basket come from? What headhunting agancy do you trust with your top-level hiring? I wouldn't be surprised if most VCs would mitigate their risks by funneling a startup's expenses back to their own investmentsnin one way or another. Vacant office space is just another such investment.
cashsterling 3y ago
As folks have said... investors are not actually concerned about the companies they invest in... they are concerned about the balance sheet of their portfolios. Real Estate holdings going deeply negative may affect their balance sheet more than one or two or all of their companies carrying extra lease OpEx. I am involved in a real estate selection process right now and I can definitely see this sort of stuff going on. I don't like it but folks with the money make the rules.

It seems hard to believe that a company’s managers would want to do their landlords a favor by paying more rent when they don’t have to. How would investors even ask for that?

coffeebeqn 3y ago

The theory was that they are also the landlords

adastra22 3y ago

I hear you’re looking to raise another round. It’d be a real shame if a board member got in the way of that.

mschuster91 3y ago

"We happen to have some cheap rental space near other companies we own, no credit checks, and you're near <insert other SaaS companies that can be used so you have close accss to them>" If you're a startup, getting office space without much bullshit is worth a premium.

danjac 3y ago

Where else are the investors investing?

foepys 3y ago

> How would investors even ask for that? What do you mean "ask"? They demand because it's their capital that fuels the company. It's not like a VC gives money to a company and then cannot do anything but wait for returns.

choeger 3y ago

Investors are the landlords, if indirectly. To be honest, I always wondered how much of the venture capital would turn into revenue for other investments. Assume, you own Microsoft stock and are a venture capitalist. How do you react to your latest investment considering to buy AWS vs. Azure? The same pattern might apply in many more direct forms. Where does that fruit basket come from? What headhunting agancy do you trust with your top-level hiring? I wouldn't be surprised if most VCs would mitigate their risks by funneling a startup's expenses back to their own investmentsnin one way or another. Vacant office space is just another such investment.

cashsterling 3y ago

As folks have said... investors are not actually concerned about the companies they invest in... they are concerned about the balance sheet of their portfolios. Real Estate holdings going deeply negative may affect their balance sheet more than one or two or all of their companies carrying extra lease OpEx. I am involved in a real estate selection process right now and I can definitely see this sort of stuff going on. I don't like it but folks with the money make the rules.