No office, no problem, according to one of Silicon Valley’s major tech investors.
In a concerning turn for commercial landlords hoping that tech companies will fill office buildings, Bill Gurley of Benchmark said an office is no longer a criteria for the startups that his venture capital firm funds.
“We are now backing startups without offices, which isn’t something we had done before,” said the longtime tech investor in an interview with Bloomberg last week. His track record includes investing in Zillow Group and Uber.
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Gurley explained that most of the early-stage companies he backs are five to 10 people and those firms are being founded without offices. He also said that without a physical office requirement, companies are more likely to hire geographically diverse candidates — and spend less money.
“People struggled with building large engineering teams [in Silicon Valley] anyway because it was just so competitive and expensive,” Gurley said in the interview. Silicon Valley is among the most expensive housing markets in the nation, although rents have fallen in San Francisco during the pandemic.
Large tech companies have already leaned into remote work with several opting to make it a permanent fixture of their corporate culture. They include Twitter, Facebook, Dropbox and Zillow.
But Gurley’s view on remote work might still be an outlier among venture capitalists. In a June survey about 60 percent of VC firms said they were less likely to invest in a startup that didn’t have an office. But a lot can change in four months, as this year has proven.
[CNBC] — Erin Hudson