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Re:Why don't rich people do more awesome things? by pg on Friday June 24, 2011 @11:07PM (#2694818)
I can't afford to. If I could afford to, I would have quietly done it. But real estate in Palo Alto is very expensive, and most of YC's investments are still illiquid. (Not that I have 5-8% in any case. We assume we get diluted down to 2% by exit, and I am one of several partners in YC.)
Re:Why don't rich people do more awesome things? by cdibona on Saturday June 25, 2011 @12:10AM (#2694898)
It's also not worth it and you'd be rewarding the building owner. Bistro Elan could move two blocks in either direction, reduce rent and recoup moving costs in months. (and I hope they do)
Re:Why don't rich people do more awesome things? by jackowayed on Saturday June 25, 2011 @12:21AM (#2694913)
Yeah, when I saw Paul's post, the first thing I thought was that it would encourage every landlord of a place that a lot of very rich people love to triple the rent and force a rich person to buy it at a favorable price.
Re:Why don't rich people do more awesome things? by DilipJ on Saturday June 25, 2011 @02:44AM (#2695121)
investing in restaurants is a great way for a rich guy to become a poor guy. One case of food poisoning and you'll be dealing with lawsuits that will force you under.

plus it's not scalable, so it's difficult to make a lot of money, unless the food is so good or unique that you can franchise it. But I'm guessing the appeal of Elan has more to do with the atmosphere than the menu...

Anyway, it doesn't matter, the reason the landlord is raising the rent is because he/she assumes that there is someone willing to pay more for the space, which indicates that there is a more economically viable operation that can be run in that area than that particular restaurant.

Re:Why don't rich people do more awesome things? by vishaldpatel on Saturday June 25, 2011 @04:22AM (#2695250)
Business leasing is usually longer-term (often 10 years) and any rent increases are negotiated. The fun starts when the lease is up for renewal:

- Landlords can refuse to renew it. I know of cases where the landlord changes and the new landlord decides not to continue the lease. When the business owners leave, the landlord restarts the same business in that location - hires his cousins to run shop. Often the businesses, despite being profitable (a lot of small businesses are just ramen-profitable) can not afford to move out so they leave everything behind.

- Landlord wants a lot more rent to reflect market conditions. This increases fixed costs, which make the business harder to run, and much more unattractive to potential buyers.

Most landlords want the businesses who rent from them to succeed and try to be reasonable with their demands because they prefer to have a stable cash-flow from their investments.

Re:Why don't rich people do more awesome things? by Chico on Friday July 01, 2011 @03:49AM (#2717441)
In the case here you're not really dealing with the restaurants itself, but with the building. You rent your space to the restaurant.
Re:Why don't rich people do more awesome things? by rdl on Saturday June 25, 2011 @04:40AM (#2695277)
Of course if you get to the point of investing in 200-300 companies per year, and lots of them do well, prices of PA real estate will get even more expensive.
Re:Why don't rich people do more awesome things? by pknerd on Saturday June 25, 2011 @06:42AM (#2695415)
Loved your honest response,Paul.
Re:Why don't rich people do more awesome things? by lakeeffect on Saturday June 25, 2011 @03:31AM (#2695177)
I thinking maybe the question was in regards to your willingness to take financing on an undertaking of your own.
Re:Why don't rich people do more awesome things? by lakeeffect on Saturday June 25, 2011 @03:36AM (#2695182)
Why quietly, i think cash flow generation is a good example to lead.