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Accidental VC: When, Exactly, Should Seed-Stage Startups Look for Office Space?
Accidental VC is a series of short posts written by me, Jay Acunzo. Though I never planned it, I somehow wound up working in VC as NextView’s VP of platform. As an operator, not an investor, I’m amazed at how many casual, throwaway comments that happen inside a VC’s office would be genuinely useful to entrepreneurs building their businesses. So this series is my attempt to share that knowledge beyond our walls … one overheard lesson at a time.
Let me rip the bandaid right away: I know this isn’t exactly a sexy topic to discuss. But since almost every founder goes through this, I feel it’s a necessary one.
So, when should a seed-stage founder — who, let’s face it, isn’t launching a business because they’re pumped to find corporate real estate — actually start looking for a legitimate office?
Answer: Much sooner than you’d think.
This was the subject of a recent conversation had at NextView HQ, so I wanted to share our conclusions publicly. (The water-cooler discussion included both VCs and entrepreneurs.)
For context, the reason a startup would look for an official office runs the gamut, from expanding headcount to serving enterprise clients and thus needing a decent space to wearing out your welcome at a shared spot and more. And while today’s world offers workers all kinds of tools and tech and services to work either remotely or as part of a larger co-working space, the fact remains that most startup teams still commute to the same location every day — a location for which their employer pays.
In keeping with the theme of Accidental VC columns, let’s keep this short and sweet:
1. You should start the process of lightly gathering data points about 6-10 months earlier than you actually need the office. Which firms or individuals can help you? Who has a good reputation? Which neighborhoods and/or buildings might make sense? What will your team growth look like if things go according to plan? Conversely, what would it look like if things go better or worse?
(A quick aside on working with brokers based on what we see at NextView: Most of our startups wind up working with the large, popular firms in town, though many start by trying to find space that’s being vacated by another startup, either due to their acquisition, closing up shop, or a move of their own. Lastly, some companies do have close ties to individuals they trust that help them search, which was the experience I had at a Series A startup a few years ago. In that situation, it was based on very strong personal relationships.)
2. You should start actively searching for space 3-4 months out. The lead time to landing your office can be surprisingly high, particularly in denser startup ecosystems like ours in Boston.
To use a concrete example, NextView moved to a new space in August of 2013. To do so, the partners started their search in earnest in March and finalized paperwork in June.
3. Know that there’s a very real impact on the company culture. This is something that some founders underestimate, so it’s worth noting here: Moving can convey a sense of the future and instill pride in a team. There’s momentum. You’re growing. You’re creating a new space (hopefully, as a team) that embodies the values and culture of the company today, while promising to house new, exciting moments in the future.
4. Keep a close eye on your financials. Obviously, an office adds to your burn, but if you can afford it, then do it. Otherwise, explore some of the alternatives mentioned above (or establish that your team will be largely distributed and bake that into how you operate and how you craft a culture).
Bottom line: Looking for office space is never the job of an entrepreneur, so the goal of this post was to help you avoid potential pain by framing the process appropriately. Start sooner than you think, and keep your financials and culture in mind.
Now then, back to your regularly scheduled programming about building meaningful businesses and talented teams to actually fill those offices.