Several alternative office models — co-working spaces, incubators and accelerators — have emerged to house the young ventures, including many in the District and its suburbs in recent years.
But these alternatives come with challenges of their own, largely because the nature of shared office space makes basic tasks, such as paying rent and locking up, more complicated.
“It’s not an undertaking that should be taken lightly, and people really know that if they’ve tried it,” said Jonathon Perrelli, the founding partner at Fortify Ventures, which started an accelerator in the District last year after receiving a $100,000 grant from city officials.
The Fortify accelerator now shares office space with 1776 at 1133 15th St. NW, a decision the organizers made when their lease on an office just blocks away expired Jan. 31. Organizers say it’s created less of a logistical headache.
“Managing real estate is a whole full-time job by itself, and we learned that in the first year,” said Simon Rakoff, a general partner at the firm.
Like other shared work spaces, start-ups rent office space at 1776 if they prefer to work in a collaborative atmosphere or need a D.C. outpost without the expense of an independent office.
Partnerships with local universities and embassies to provide entrepreneurship and business resources are in the works. 1776 will also play host to technology events and classes on topics such as social marketing, said Burfield, who also serves as chairman of Startup D.C. and is founder of Reston-based Synteractive, a technology reseller and business consultancy.
He said the 1776 business model calls for rental income from start-ups and tuition for classes to contribute the largest share of revenue. Burfield and Harris, a managing director at the Startup America Partnership, also plan to recruit corporate sponsors.
A grant, with strings
The city grant reflects an effort by the officials to nurture the local technology sector, which Mayor Vincent Gray (D) has said on multiple occasions could become a source of jobs and tax revenue.
David Zipper, the city’s director of business development and strategy, acknowledged that shared offices can be risky, but said incubators and accelerators help compensate for the city’s high rents and lack of venues for tech events.
“1776 addresses a number of needs that no current incubator and accelerator has,” Zipper said. “That sort of capacity is something we don’t have in the city at all.”
The city has stipulated that 1776 must remain in the District for at least five years. It must also set aside 20 percent of seats in classes for District residents and offer quarterly tours of the space to D.C. youth.
“Is there a risk involved? Yes. There always will be in that space,” Zipper continued. “It’s something the tech community is very accustomed to.”
GeekEasy, a co-working space on Florida Avenue that opened in October 2011, closed six months later when it couldn’t pay the rent sought by the building’s owners. With a revolving door of start-ups and uncertainty about the sustainability of their businesses, leasing the right amount of space and establishing rent prices became difficult.
“We had more space than we needed and not the same number of customers there all at the same time in order to fill the space,” Stacy Smith, one of the incubator’s managers, said last April. “It’s kind of a guessing game that you play when you’re establishing real estate for something like that.”