In A Crowded Market, A VC Uses Its Office As A Hook

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Make Magic’s Assistants Do Almost Anything With $100/Hour And A Text Message

You might be hearing talk of depressed valuations, but that message certainly isn’t reaching commercial real estate owners in the Bay Area. The median price per square foot to rent office space in the city has shot up 33.7 percent in just the last three months alone, says Loopnet, an online real estate resource. Over the last 12 months, San Francisco rents have soared 106 percent.

It’s easy to throw up one’s hands at that the situation. Aspect Ventures, a year-old, early-stage venture firm founded by longtime VCs Jennifer Fonstad and Theresia Gouw, is instead using the trend to its advantage by renting up to 20 desks in its own, 2,600-square-foot headquarters in San Francisco. It’s charging market rates, too.

It’s a smart move on a number of levels. First and most obviously, it helps Aspect defray its own costs, which can’t be inexpensive given current prices. According to real estate specialist Jones Lang LaSalle, average office rent in San Francisco has hit a whopping $70 per square foot.

Aspect, which closed its debut fund with $150 million last year, is also willing to rent the desks to both startups it has backed and those it might fund in the future, which allows it to see more young companies up close.

That’s harder to do than you might think. While VCs can drop into their companies for board meetings and more, once that first check is written, it’s often difficult for them to maintain a full picture of what’s happening inside a company. It’s a lot easier when a founder is pulling out his or her hair from just half a room away.

Of course, what Aspect is also trying to do is find a way to interact and contribute to the entrepreneurial community. As Fonstad explains it, “We want to enable entrepreneurs to be truly independent and still benefit from a shared environment of working alongside other entrepreneurs and venture folks like ourselves.”

One of those perks is being able to quickly ask someone at Aspect about a confusing term or condition, for example. Another is taking advantage of the content programming that the venture firm organizes for its founders every couple of weeks and that everyone in the office is invited to attend.

Still, the biggest benefit right now may simply be the ability to land a desk in a city where there isn’t much available office space anymore.

As for conflicts – what if a startup moves in and doesn’t want funding from Aspect, or isn’t offered it – Fonstad downplays the possibility, saying there’s no “implied obligation” on anyone’s part.

To be on the safe side, Aspect does have each potential tenant go through a short application process to make sure it will be – in some way, shape or form – “additive to the community.” If there are any potential conflicts or concerns, Aspect is transparent about that, too, she says.

After that, it’s up to the startups — who are expected to stay around six months, ideally — whether they stay or go. “They can make a choice for themselves,” she says.

Photo courtesy of Aspect Ventures. From left: cofounder Theresia Gouw, principal Lauren Kolodny, cofounder Jennifer Fonstad, and associate Kamil Saeid.