VC community spaces: WorkLife and Contrary NYC

VCs rethink where — and what — their office spaces are

In the pre-pandemic times, Contrary’s network of venture scouts, founders, and top technologists reflected the magnetic pull Silicon Valley had on the tech industry. About 80% were based in the Bay Area, with a smattering living elsewhere. Today, when Contrary asked where people in its network were living, the split had changed with 40% in the Bay Area and another 40% living in or planning to move to New York.

It’s totally bifurcated now, said Contrary’s founder Eric Tarczynski. “That was a big wake-up call for us. Before the pandemic, New York wasn’t even really on the road map,” Tarczynski said. “A huge cross-section of engineers are now in New York.”

Sand Hill Road is losing its shine as more VCs rethink where they’re located. That’s not to say the Bay Area is over (I’d argue far from it). But cities like New York are still “having their moment” and continue to grow in share of venture deals over the Bay Area.

• In the last year, venture firms like Sequoia, Andreessen Horowitz, and Lightspeed have added offices in New York City.
• Check-writing partners for Greylock and Threshold VC moved to NYC, while other firms have stealthily set up shop with small teams working out of WeWorks. Even the reporters covering Silicon Valley are moving to NYC.

There’s another strategy change afoot. More venture firms are experimenting with building community spaces instead of more offices for their partners to work out of.

• In New York, Tarczynski’s venture firm built Contrary NYC, a space that’s meant to be like a Soho House for techies (minus the pool, restaurants, and hotel rooms). It’s supposed to evoke the feel of a club where engineers and entrepreneurs can hang out together, have a space to work, and host events for people in tech. In the last few weeks, there have been female founder dinners, comedy shows, and an appearance by Serena Williams at a launch party for startup Parfait held at Contrary NYC.
• In Los Angeles, Brianne Kimmel’s Worklife fund opened up its new Worklife Studios space in the Silver Lake neighborhood. She advertises the space as a location where “Discords and DAOs can host events, remote workers can meet new people, and anyone can enjoy our eclectic schedule of gatherings — from dinner parties with the neighborhood to album listening parties with artists.” This past weekend, a thousand people were waiting in line to get into its space: The band Wallows was doing a pop-up merch store.

Part of it is finding a tribe outside of Silicon Valley. In SF, it can be frustratingly homogenous with many people working in and around the tech industry. In NY and LA, there’s more diversity and with that more opportunity for VCs to step in and be that beacon for the tech communities in a way that’s not as needed in a market like the Bay Area. “For the past 20 or 30 years, SF was the only game in town,” Tarczynski said. “Having a little bit more distribution and even talent flow is frankly pretty good for the venture community.”

Overheard

“This makes it seem like I’m desperate. Please stop,” Elon Musk texted angel investor Jason Calacanis over his promotion of an SPV to buy Twitter shares. Court filings filled with Elon Musk’s texts this week showed the fascinating network of relationships and power brokers that surround Musk in this deal — and the things that they’re angling for. Steve Jurvetson suggested Emil Michael for the job of CEO, but Musk shot it down in favor of someone with actual software experience. Larry Ellison and Reid Hoffman both signed off to invest billions via text. Calacanis had the most interesting relationship with Musk, sending off ideas about charging people, forcing employees back to the office, and even throwing his name in the ring for CEO. Musk asked if he wanted to be an adviser, and Calacanis replied “Board member, advisor, whatever.” “[Y]ou have my sword.” That tone changed later on when Musk appeared miffed at Calacanis after Morgan Stanley and Musk employee Jared Birchall were “very upset” with the way Calacanis was running the deal and that he was taking advantage of his friendship with Musk. “Only ever want to support you,” Calacanis replied in the texts.

“Some of the business practices don’t rise to the level of ethics that we’re all used to in private equity with your investors and your customers and your community, and that has been a bit disappointing,” said Thoma Bravo co-founder Orlando Bravo in a rebuke of the crypto industry. After buying shares in FTX and a handful of other crypto companies, the private equity billionaire told the FT that he’s backing off investing in the crypto market for now despite remaining long-term bullish on the sector.