A Tale of Growth
Let’s chat for a minute about growing startups and office space.
Uber was founded in March 2009 by Travis Kalanick and Garrett Camp. By the summer of 2013 Uber had 239 employees. 2 years later in the winter of 2015, they reached 4,408.
Keep in mind that Uber’s 2012 San Francisco office was only 25,000 square feet.
Just a few weeks ago, they finalized a commercial real estate deal that added 170,000 square feet to its collection, bringing the total to 930,000 square feet leased in San Francisco.
Unfortunately, even if you reached out to Uber back when it had 239 employees, you would never have been the broker to find their next office. The founders already had a strong relationship with someone else, so why would they work with a broker they didn’t trust?
The trick is finding a company when they are around 10 people and set to blast off. But how can you identify growing startups early enough to build a relationship that spans a few offices and many years? Keep reading.
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Befriend investors making good bets
Networking with Venture Capitalists and Angel Investors should be atop your To-Do-List this year.
Start with this list of 3,400+ startup investors ranked by the growth of their portfolio companies. At many of the funds, you will find investors advising quickly growing startups in need of office space.
Angel Investors and Venture Capitalists spend their days guiding and building relationships with brilliant startup founders. For many of these founders, their investors are the first people they lean on for help in areas where they have little expertise. Commercial real estate is one of those areas.
Jason Calacanis is one of Silicon Valley’s most well-known Angel Investors. 11 of the companies he’s invested in have grown their headcount by at least 15% in the past 6 months alone. (1)
When a founder of one of these companies goes to him asking, “who should I talk to about leasing office space,” wouldn’t you like to be the first broker who comes to mind?
If you can build a relationship with a few investors, and you have a track record of finding companies their dream office space, you won’t need to spend any more time cold calling tenants across the city. You can start building a steady stream of warm referrals.
Focus on companies worth your time
Even if you befriend a few investors who pass startups your way, there are many more companies out there to turn into clients. How do you decide which are worth investing your time building relationships with?
Start by looking for companies growing headcount quickly that haven’t raised any funding in the past 6 months. Chances are they are making a lot of money and already talking with investors about their next round of funding. These are the ones ripe for outreach that won’t be swamped with voicemails and email from other brokers. In the US alone, at least 6,620 companies that have grown employee headcount by 5% over the past 6 months and raised money over 6 months ago.(2)
Another tip is cross-referencing your current client list with other companies you’ve gotten wind of on Twitter. For companies that are a similar size, who has more followers? Who’s having more conversations with those followers? It might sound simple, but this is a good way to put your finger on the pulse of a startup’s growth.
It may even help you discover a hot startup before they get major news coverage, and all the other brokers in your city become aware.
Don’t wait until after a startup raises money to reach out
If you wait until news about a startup raising money hits the press, you’ll never get in on a big deal.
Any congratulatory messages you leave will come off as insincere. You weren’t there for the founders during the hard times, before there was any money in the bank. Why are you poking your head around now? On top of your message coming off as insincere, everyone the founder has ever known is reaching out at this very second to offer congratulations, other brokers included.
If the founder was good enough to build a company that could raise a meaningful amount of money, chances are she was also smart enough to think ahead about office space. She didn’t wait until the money was in hand to begin looking for a larger office. That process began weeks, if not months, ago when the founder began negotiating terms of the funding round.
Exclusive Bonus: Download the free report of 34 San Francisco Startups That Will Need Office Space Soon
Become a trusted early advisor
Commercial Real Estate is a relationship-based business, and you should be building a relationship with a founding team at least 6 months before news of them fundraising goes public.
Remember that you’re not dealing with a company. You’re dealing with a founder who will soon be responsible for finding office space for her team. Ask yourself how you can help her before office space is even on her mind.
Most founders who succeed in building successful companies are surrounded by expert advisors and mentors. Your expertise is in commercial real estate and networking. Save the real estate advice for after you’ve built a good relationship. Is the founder running a company with a 10 person team? Introduce her to any founders of 30-50 person teams you know. She’ll be looking for advice from entrepreneurs who are a few steps ahead of her. Facilitate that process.
Will you be networking with investors soon? Drop the founders name in a conversation and mention how you’ve heard about her company doing big things. The next time you’re chatting with the founder, feel free to name drop the investor and don’t hesitate to say how her name came up.
In a few months when fundraising talk starts to heat up, don’t be surprised if your name is the first one she thinks of; you were there for the company before any other broker was.
Be the first to find growing startups in your city: Download the free report: 34 San Francisco Startups That Will Need Office Space Soon
Image credits: Inc., The Phat Startup, Stock Up, Fortune
Sources: (1) According to Mattermark data on Jason Calacanis’ portfolio. (2) According to Mattermark data on US companies.