“From raising start-up funds to running a business, the internet has changed the rules for entrepreneurs,” explained Rick Singer Chairman/CEO Network Media Holdings, Inc. “Now, a click of a mouse gives you instant access to numerous funding options".

But Singer has a warning. Funding is just the first step. A start-up must focus on containing operating costs. “Typical class A office space can run from $25-45 per square foot (depending on the location and amenities of a building), he said.  “If a startup was to occupy 1,000 square feet, the monthly rent would be anywhere from $2100 to $3750 per month.”

“Electricity is $150-300 per month. Further, a startup would have to purchase a phone system at a minimum of $1,500, furnishings, internet connection, photocopy machine, etc. This is not a cost effective plan unless the startup was heavily funded, which most entrepreneurs are not.”

Singer believes a better scenario for a startup would be to try to work out of home. “Even if a startup has 2-3 employees, they would not require a huge amount of space,” he explained. “While working from home, there are many tools available such as a virtual phone answering service, efax, virtual office, etc. Companies such as J2 Global provides many of these services. An advanced automated call and voicemail service starts are $39.00 per month, thus eliminating the cost of secretary to answer the phones, a savings of $2,000-$3,000 per month.”

Singer also suggests an executive suite (shared environment). “Companies such as The Regus Group offer many services including a furnished office suite; with a phone system, and someone that answers the telephones from 9am-5pm,” he said. “Typically, the costs start at approximately $1,000 per month.  The startup can have a corporate environment to work out of, a support staff and a professional image to attract investors.”

Networking and VC Contacts:

Venture Capital Institute - Info about venture capital.

Price Waterhouse Venture Capital Survey

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