Is there karma at buildings where startups are launched?

I continue to publish some materials from my blog IdeaBlog.ru , dedicated to venture capital investments, venture capital investors and start-ups.


Palo Alto, California, at 165 University Avenue, is a two-story office building where companies such as Google, PayPal, Logitech, and Danger rented their first office. It belongs to the family of Iranian immigrants Amidi since the early 1990s, and Saeed Amidi says that this building has good karma.
The Amidi family, along with their partner Pezhman Nozad, also owns a Persian carpet shop in Palo Alto. This allowed them to get acquainted with many startups and investors, and their office building helped them to find an unusual way to join the ranks of investors of the most famous Silicon Valley startups.

“We believe in good karma, in positive energy, in positive feelings, and we also believe that some buildings have positive energy,” says Mr. Amidi, pronouncing words slowly and with an accent.

Like many property owners during the dot-com boom, Said Amidi was looking for a chance to invest in his tenants. One of those startups who rented an office from him and into which he invested was PayPal, the purchase of which by eBay for $ 1.5 billion brought Amidi millions of dollars and a taste for investing in technological startups.
Logitech, a maker of computer peripherals, and Danger, who created the T-Mobile Sidekick smartphone, were also its tenants. Like Google, which took steps in this building from a small startup to a promising technology giant.
Amidi and Nozad tried to capitalize on the reputation of these companies, spreading the view that the offices in their building at University Avenue are “lucky”. At the same time, they understood that it was necessary to take the magic of this building - real or imaginary - and reproduce it on an industrial scale.

“Our idea was to bring the charm of our office building to Sunnyvale,” says Amidi.

Sunnyvale is located 12 miles from Palo Alto, and there they created the Plug and Play Tech Center, a three-story building of 150,000 square meters. feet, where they rent offices and provide other opportunities for startups. Since its opening at the beginning of last year, this building has become the center of entrepreneurial activity and 108 start-up companies are currently working there.
As landlords, Amidi and Nozad have the opportunity to look at their business and get a chance to invest in promising companies before others notice them. The investment fund they had created, which they named Amizad, invested 40 companies in the amount of $ 25,000 to $ 1 million. Amidi and Nozad refused to talk about the profit their investments bring, but they said that 7 companies from their portfolio already had sold out. Speaking about losses, they said that at least one of them was sold at a loss. Nevertheless, their image of successful investors impressed some powerful personalities of Silicon Valley.

“They actually very well integrated into Silicon Valley,” said Ron Conway, an investor in dozens of technology startups, including Google. “They started as landlords for technology companies, and then they got their way.”

The Amidi family had a number of successful enterprises in Iran, then they emigrated to the USA after the 1979 Islamic revolution and settled in California, founding a number of enterprises belonging to the Amidi Group holding. Among these enterprises are oriental carpet shops, Medallion carpet gallery, an international water supply company that brings, according to Amidi, $ 150 million a year and a large holding owning real estate operated by his brother Rahim Amidi.
But they could not resist the temptation to invest in a technological boom that began in the second half of the 1990s. And their carpet store, as well as the building on University Avenue, gave them an excellent opportunity to participate in it, despite the lack of knowledge and connections in the technological world.
In a carpet store, for example, Amidi and Nozad met Andy Rubin, the founder of Danger, when he went to buy a carpet. The sale of the carpet turned into a long conversation in which they became acquainted with Rubin’s plans for the development of their startup. When the carpet sale was completed, Amidi and Nozad told Rubin that they were investing in startups, and would like him to meet Amidi's father (he was already dead).

“He came to our office and we showed him what we plan to do,” says Rubin, who worked at Google after he bought another start-up from him, which he founded. “He looked at us and told Said and Rahim that he wanted to invest money in us.”

Their investment in Danger was $ 400 thousand, plus they offered the company a discount when renting an office. Amidi says that the decision he made was more of a bet on Rubin's abilities, which he saw during the negotiations on buying a carpet, than a bet on the technology itself.

“Every time you talk about financial relationships ( like buying a carpet, as I understand it :) - IdeaBlog.ru ), you get the opportunity to see how a person thinks, how he negotiates, what his abilities are,” Amidi says. “We think this is very important.”

Little by little, Amidi and Nozad converted the people they met in their store into a network of friends and people who could ask for advice, among which were many entrepreneurs and venture capitalists. But if the carpet shop was the place where they made friends with the technology elite, then their building at 165 University Avenue turned them into famous personalities.

Google rented an office in this building, fascinated by the fact that renowned companies, one of which was Logitech, rented their first office here, and landlords showed him office rental contracts concluded by these companies. “I said jokingly that maybe once, to other tenants, the building owners would show our office rental contract here, and say that they rented their first Google office in this building,” says Craig Silstein, the first employee who was hired two founders google.

When Google drove into its office in early 1999, it had only 6 employees. And in just 6 months, the company’s office was crowded 10 times as many employees. But, more importantly, during this time the company received funding from two of the best venture capitalists of Silicon Valley and signed its first big contract with Netscape.
The Amidi family did not have the opportunity to invest in Google directly, but they invested the company through the Conway Fund. They also aggressively sought the shares of their next tenant, PayPal, although they didn’t forget to ask their more technologically educated friends to "interrogate" the company's founders.

“I thought that I would talk to a person who is well versed in building dams, and who will ask me how the computer turns on,” says Max Levchin, founder of PayPal. “But they brought with them a man who was a very strong engineer. Their due diligence ( valuation of the company and its business - IdeaBlog.ru ) significantly exceeded all our expectations. ”

Successes of Google and PayPal attracted many new tenants to Amidi. Kevin McCardi, for example, also worked in a building where Google was a tenant. In 2004, he helped find the Picaboo company that produces photo books for the order.

“When we founded Picaboo, we wanted to get an office in this building because Google was here,” says McCardy. - "This is a magical place."

The magic of the building should lead to the emergence of new blockbusters. But Amidi and Nozad turned their attention to the Plug and Play Center, where they are trying to eliminate logistical problems that are a headache for startups. They are flexible in providing their tenant offices of various sizes, are willing to work without long-term contracts and provide access to the data center and telecommunications infrastructure. They also provide such opportunities to their tenants, which usually only large companies can afford. They made a gym in the business center, and also opened a coffee shop with the help of Charlie Ayers, the chef who founded the famous Google coffee shops.
Omid Kordestani, one of Google’s top managers, says that Amidi has the ability to “learn what surrounds him”.

“His natural mind is manifested here,” says Kordestani, calling himself Amidi's friend. “There are many elements in his Plug and Play Center that he took from Google — a coffee shop, a lot of different colors in the design.”

Amidi promoted his Plug and Play Center through an almost constantly passing series of meetings of entrepreneurs, at which start-ups could meet their colleagues from other companies, including investors and employees of large companies who could become their partners or customers. These meetings helped attract $ 200 million in Amidi tenants in the form of financing.
At recent meetings at the Plug and Play Center, Jeff Crow from Norwest Venture Partners ran into CEO of the Lending Club, which is one of the start-ups renting an office at the Plug and Play Center. They talked, and in August of this year Norwest organized financing for a startup in the amount of $ 10.26 million. This was only one of six investments that Norwest made in the tenants of the Plug and Play Center.

Jeff Crow pays tribute to Amidi’s ability as a venture capitalist. “As a venture capitalist specializing in early-stage investment in start-ups,” he says, “he's exactly the person you want to deal with.”

The reputation of the Plug and Play Center should overshadow the reputation that surrounds the building at 165 University Avenue.

“I’m not particularly superstitious, and therefore I’m not saying that a building in itself can be a luck,” said Peter Thiel, one of the founders of PayPal. But he says that this building was the right place and located in the right place. Like many others who worked here, he affectionately talks about the terracotta patio, in the center of which was a small fountain that was a place for making connections. “If I were a startup again,” says Thiel, “I’d probably have the same office.”

An article from the New York Times was used to prepare this material.

This article on the blog IdeaBlog.ru is here .