Charles Bonello, Matt Harrigan and their team at Grand Central Tech have an interesting solution to the start up office problem. Yes, securing office space is a problem. Easy if you want to go to conventional shared space. More difficult, time consuming and expensive should you want to secure a prime lease, i.e. your own office space. This is a skill set which very few, if any, entrepreneurs are experts.
The most interesting opportunity here is not the free rent. Its a professionally managed multi user office environment with the value add of selected companies with a higher probability of success. You know the story if you want to play better tennis then play with better tennis players. Same with whose in your shared office space. Already GCT companies have been founded by the founders of Gilt Groupe, General Assembly, Rights Flow, and Shapeways. Altogether, the companies from our first and second classes have raised over $40 MM in funding.
Why do they give you free rent? What’s in it for them? Well, they establish relationships with early stage companies and at some point they will need new office space. Real Estate firms spend a lot of money in marketing and advertising to secure tenants for their properties. Its usually done quickly and under pressure and it takes too much time and is expensive. Establishing a relationship with early stage companies, some of which will experience rapid growth allows for a better and longer relationship between landlord and tenant. It makes a lot of sense. The landlord puts skin in the game. Its a slow relationship building form of marketing, It’s the best kind.
For professional service firms. Real Estate, Law, Accounting, etc. work with young companies because thats where the growth comes from. From 1 person a few days a week to many bodies working on the Microsoft account, PR firm, WE, formerly known as Waggener Edstrom Communications has grown their business as their signature client has grown.
How well do they pick companies? Time will tell. They are smart. Experience is on their side.
I’m curious about the journey for their initial 18 companies housed at GCT. Im also curious about what happens to the 982 companies applied and were not accepted.
Go, its time to apply.
Grand Central Tech is now accepting applications for its next class! Housed in Facebook’s former NY Headquarters overlooking Grand Central, GCT’s goal is to provide the best start-ups with the best resources at unbeatable terms: a full year of office space, access to interns, world class mentors, legal/tax/accounting services, in house recruiters, a global network of investors and access to top corporate partners — and takes NO EQUITY and NO RENT. Applications are due by April 28, and will be reviewed on a rolling basis. Apply here.