[icedchai]

This happens more often than not anyway. Overpriced office space, expensive furniture, extra layers of management because we're "structuring to scale the organization", fancy and expensive titles for people who barely do anything. I worked at one place that raised 70 million, then spent 10 renovating a rented space, only to close up barely 1 year later. I had left by that point.

[kjkjadksj]

How does one find these jobs where the founders are planning on lighting a pile of money on fire and not working ever again? Would love to burn some money myself.

[Ancalagon]

It’s easy, just look for the startups with ads plastered everywhere and box office seats at your local professional sports league stadium.

[fancyswimtime]

Action Jack

[icedchai]

Yes, except this was real, not fiction. I witnessed it more than once. During the dotcom days, a company I worked for raised 8 mil... then blew 25% on renovations. I still remember getting a tour of the "space", where the new logo (which probably cost 6 figures to design) was unveiled.

[quickthrowman]

If they were burning $5M a month, not renovating an office for $10M would’ve bought two additional months of salary and operational costs. I assume the bulk of the other $60M went to salaries?

My company just spent $10M renovating an office but we’ve been in business for several decades and have been profitable every year for the past decade, I’m not sure about prior to that. It’s not always a bad idea to spend money on office space.

Tenant improvements (office remodels) are $75-$150/square foot these days depending on the level of finishes and FFE (furniture, fixtures, and equipment), and can go higher if you’re building out dozens of offices instead of open office space with perimeter private offices or want high end architectural lighting, aesthetic flourishes, etc. I know you can wire up a basic office with lights and receptacles for about $15/sqft if you use union labor and basic 2x4s/recessed cans for lighting.

My state allows 1 occupant per 150 gross sq ft of floor space (interior partitions, columns, and other items that occupy floor space are counted in gross square footage), so an office tower with a 22,500 sq ft floor plate allows for 150 occupants. At $100/sqft, you’re looking at $2.25M to build out a single floor of an office tower.

Depending on the market, the landlord might offer an allowance for tenant improvements or ‘pay’ for the improvements and they get paid back later over time through rent payments.

[icedchai]

Yes, that sounds right. There were roughly 400 to 500 people near the end, if I remember, so $5M monthly burn is in the right ball park. This was over 15 years ago when salaries were much less. Usually waste in one area, like office space, means waste in other areas. So, yeah, the office space alone wouldn't buy much time. You'd need a whole change in attitude.

[quickthrowman]

Oh this was 15 years ago? $10M is pretty extravagant for ~500 people, considering construction labor was nearly half the price it is now back in 2010, probably 60-65% of today’s wages.

[icedchai]

Yeah, it was around 2010 - 2011. It was a very nice building!