coming areas committed to economic development.
Phone2Action, which makes advocacy software, found
a five-year tenant-favorable lease by moving to Arlington
County, near Washington, D.C., where Amazon plans to
open its headquarters. The company received funding
to train employees and a $50,000 grant from the Arlington
Economic Development bureau, which it used to help
build out a new o;ce, says co-founder and CEO Jeb Ory.
A good relationship with your city can also make it easier
to learn which federal, state, and city workplace laws apply
to your o;ce. Ory, for instance, is in the process of improving
Phone2Action’s “mothers’ room” (as of 2010, the federal Fair
Labor Standards Act requires most businesses to provide a
place other than a bathroom for nursing moms to express
breast milk). Your state’s department of labor should provide
information online about what your business must do to comply with its laws, but these requirements are often onerous
enough to justify legal counsel. If you can’t hire a full-time
lawyer, consider paying one to put together a checklist so you
can make the necessary o;ce updates on your own, suggests
Doug Bend, a San Francisco–based business attorney.
Finally, talk to employees to get ahead of less obvious
issues, from co;ee complaints to o;ce decor. Ryan Matzner,
co-founder of app design company Fueled, built an employee
feedback program after relocating o;ces in New York City last
April. The program was designed to give sta; some say over
their workspace. (“You spend more time in your o;ce than
you do in your living room,” Matzner notes.) But Fueled also
deferred making many decisions—like where plants should
go—before actually spending time in the o;ce.
“Seek more advice and outside expertise” around the
functions of the space for you and your team, Matzner suggests.
A lot of the smaller stu; “can be undone or changed later.”
Medina spends a lot of time
worrying about o;ce space.
It started when his then-
20-person Seattle sales software company, Outreach, moved
into a large o;ce with what seemed like plenty of room to
grow. Business boomed, and he started hiring—until his landlord refused to issue key cards for his new employees.
It turned out that Medina had signed a lease with a certified green building that imposed strict limitations on the
number of occupants per square foot. So he rented a floor in
a building across the street—on the opposite side of a busy
intersection. “People would literally not walk across the
street for a meeting,” he recalls.
Outreach ultimately moved four times in three years as its
headquarters swelled to 250-plus sta;ers. Along the way,
CEO Medina and his co-founders had to deal with everything
from unforgiving subleases to employee commute concerns—
which are just some of the logistical, financial, and even legal
challenges that startups can face as they outgrow co-working
spaces (or founders’ basements). According to design firm
Knoll, startups experience the greatest amount of o;ce-space
friction;when they’re between 30 and 74 employees. It’s common to move several times during these years, as you try to
anticipate your company’s long-term sta;ng needs—and avoid
getting locked into expensive or restrictive long-term leases.
So while your head count is still in double digits, look for
leases in the one-to-two-year range, advises Justin Agans,
a startup lawyer in Charlotte, North Carolina. “You can kind
of deal with anything for a year,” he says. If you can’t find an
agreement for less than three to 10 years, ask for language
that requires a landlord to allow you to find a subletter in case
your company has to break the lease—for good or bad reasons.
“Whether you experience explosive growth or things just don’t
work out with the business, it’s important to understand how
you can get out of the space if you need to,” says Tricia Meyer,
a Chicago-based business attorney and founder of Meyer Law.
Landlords tend to be more willing to negotiate in up-and-
Beating the O;ce-Space Blues
The occupancy limits, nursing rooms,
and fine print of finding the right
real estate for your business.
JEANINE SKOWRONSKI ; WEALTH SHARE
a veteran personal
finance journalist and the editorial director
of Policygenius, a
New York City insurance