How Quickly a “Genius” Startup Can Tank

By Kevin Montgomery ; VALLEYWAG – EXCERPT

Bloodhound had everything going for it. TechCrunch once hailed the tradeshow app as “genius” and Peter Thiel led a $3 million investment round in the “blowing up” company. So when a landlord drove out apopular arts collective from its home in the heart of the San Francisco’s Mission District, Bloodhound was quick to sign as the new tenant. Fifteen months later, the company is out on the street and being sued for unpaid rent.

The company’s rapid fall serves as cautionary tale of the consequences a startup faces when it aggressively burns through their funding. But it also shows what can happen to a neighborhood when landlords chase the high rents paid by venture-fueled tech companies.

Million Fishes Art Collective sat at the corner of 23rd and Bryant for nearly a decade, reportedly paying over $13,000 a month in rent for a space deep within gang territory. The 10,000 square foot collective housed dozens of artists and was routinely open to the public for shows.

But soon the neighborhood became trendy among techies and the gang violence subsided. And in the fall of 2012, Million Fishes’ landlord booted them from the space with the hopes of attracting a monied startup to the space.

It was around the time of Million Fishes’ displacement that Bloodhound was in the middle of raising their Series A round. When the round closed in January 2013, it brought the company’s total funding to $4.8 million. Flush with cash, Bloodhound responded to a Craigslist ad for the recently refurnished ground floor office at 2501 Bryant Street. They ultimately signed a five-year lease for $31,667 a month in rent (plus $564 in fees)—nearly two and a half times the amount the arts collective had been previously paying.

Criticism poured in. Million Fishes’ warned of the “the fast-track erasure of a neighborhood we love” on the eve of their eviction. Many in the Mission agreed tech money was decimating the local artist community…. (MORE)

 San Francisco follows the trend of killing off the artists and art spaces that is running rampant all over the country. It is really all about land values an what deserves a spot in the city. Money or culture. The two don’t mix well.


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