Thoughts on startups by investors that
fund them & entrepreneurs that run them

Startups: Is purchasing office jellyfish a good use of investor money?

If the investor thinks it is, then it is. If not, no.

While that may sound simplistic, it’s actually accurate. It is important to look at questions like this holistically. Investors are putting their money behind an entrepreneur and his/her particular vision, team, and operating skills. If the entrepreneur believes that having office jellyfish is a Good Thing for company morale and a work environment that is conducive to a more productive startup team, then either the investor believes in, and supports, that choice…or else there needs to be a heart-to-heart talk about what is appropriate and what isn’t, for a given stage of a company.

If you visit the Google complexes, or those at Bloomberg, NewsCorp or other successful leading edge ventures, you will see an absolutely extraordinary number of things that appear on the surface to be ridiculous indulgences.

Somehow, though, I don’t see Google’s investors (i.e., stockholders) descending on the company with torches and pitchforks decrying these as a waste of money. Instead, they clearly help Google to recruit and retain some of the very best employees around (just ask anyone in New York or Mountain View.)

Now, massage tables and game rooms and unlimited gourmet food might be appropriate for a company with a few billion in revenue, but your Series Seed investors would likely be a tad upset if 95% of their initial seed investment went to pay for a corporate jet. However, given a degree of common sense, there certainly are some perks or ‘frivolous’ purchases that might be appropriate for even the smallest startup, if they really do help form a cohesive team and keep the mood upbeat and competitive.

For example, at Gust every employee is issued a full complement of Nerf Guns with ammunition….which means that after-hours visitors take their lives in their hands if they arrive unarmed.

We’ve also got free snacks, free lunch and breakfast once a week, a free cappuccino machine, monthly office-massages for everyone…and a complete, high-end rock band setup (the real thing: Roland V-drums,Kurzweil keyboard, Gibson Robot Guitar, etc.), although that’s just because I’ve always wanted to be in a rock band.

But when I recently purchased an 80″ 3D big screen TV to go along with our PS3, my board only raised its collective eyebrows a couple of millimeters, because the $4K cost, relative to our 30 person insanely-hardworking staff, didn’t seem all that much out of proportion (besides, it is great for presentations!)

So, you need to think carefully about your prospective office jellyfish, and if you aren’t immediately comfortable with whatever answer you come up with, go ahead and broach it with your investors to ask the question, and see whether your current funding/traction stage warrants spending +/- $3K on gelatinous invertebrates.

*original post can be found on Quora @ : http://www.quora.com/David-S-Rose/answers *

Written by David S. Rose

user David S. Rose Founder and CEO,
Gust

David has been described as "the Father of Angel Investing in New York" by Crain's New York Business, & a "world conquering entrepreneur" by BusinessWeek. He is a serial entrepreneur & Inc 500 CEO who chairs New York Angels, one of the most active angel investment groups. David is also CEO of Gust.

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Comments

One thought on “Startups: Is purchasing office jellyfish a good use of investor money?”

  1. Edu® says:

    True. A start up cannot compare to a multimillion dollar company like Google. We need to minimize our operational cost best we can but at the same time ensure employee satisfaction otherwise risk losing them at this crucial time.