The Boston office market’s slide is helping build a bigger playground for local tech startups.
With millions of square feet on the market, several venture capital firms have snapped up cheap subleases. Now, they’re offering space to companies they are backing, potential entrepreneurs, and even event organizers.
The new firm Venture Guides has taken a full floor in the modern office tower at 120 Causeway St., even though it only needs about one-quarter of the space for itself. Founded by a group of five executives (including Bain Capital Ventures veterans Ben Nye, Ben Holzman, and Mo Garad) who sold their last company, Turbonomic, to IBM for about $2 billion, Venture Guides is encouraging its portfolio companies to come to Boston.
Three have moved in so far, according to Nye, who is still a strategic adviser at Bain. The proximity of the firm and its startups helps build relationships, create an engaged culture, and let people “be available in a way that remote work does not offer,” Nye said.
One of the firm’s portfolio companies already in residence is Elastiflow, which makes network monitoring and security software. The company was started by Rob Cowart, who lives in Germany. But Nye and Holzman encouraged him to use some of their available space when he needed to hire a sales team. (Going back to the days of Lotus, the Boston area has long been a hotbed of enterprise software, with loads of experienced sales people.)
“It just made logical sense to build the team in this great space,” Cowart said on a recent visit.
So far, only about half of Venture Guides’ space is in use. On a tour of the floor, grey carpets and a wall of windows overlooking the roof of the TD Garden awaited future occupants.
In another part of the city, Pillar VC moved from an office with about 4,000 square feet in the Leather District near South Station to a Back Bay office tower with five times as much room. But the VC firm doesn’t plan to expand its own staff into the extra space.
Instead, its portfolio companies and people between jobs thinking of starting a new business are welcome to sit at the 80 or so available desks, Pillar VC founder and general partner Jamie Goldstein said. This week, a group of entrepreneurs interested in generative AI used part of the space for an impromptu conference, he added.
“There are plenty of people that like working in person,” Goldstein said. “They’re tired of working at the kitchen table or in coffee shops. They like being with other professionals who are working on cool stuff.”
At Venture Guides, the extra space has room for gatherings. The firm’s staff and two of its software startups meet to hear outside speakers and also held a pre-Thanksgiving lunch last week.
It’s not an entirely positive story for local tech. The low-cost spaces so far have come from larger tech companies such as Wayfair and Rapid7 that found themselves locked into leasing too much space after layoffs. An record 38 million square feet of office space is available in the regional market, according to Colliers, thanks to overbuilding and corporate downsizing.
But Goldstein hopes more startups and their investors will fill in the empty spaces.
“We took advantage of something that we perhaps couldn’t have done otherwise,” he said. “It’s a tremendous opportunity for the city.”