Landlord Accepts Rent Paid In Equity
POTRERO HILL, SF— In an email to his tenants, landlord Eric Smith, 57, announced that he is now accepting rent payments in equity.
“I’ve always tried to stay on the cutting edge of technology,” said Mr. Smith. “I was the first to take rent payments in 2001 with PayPal, and recently I’ve started accepting Bitcoin and Ethereum. But then I thought, ‘Wow, everyone here gets paid in cash AND equity, but I’ve never thought to accept rent paid in equity!’”
In tech-saturated Silicon Valley, even people purportedly standing on the sidelines can be a part of the boom. One of Silicon Valley’s most notable investors started as a rug merchant, while artist David Choe took equity instead of cash for painting Facebook’s offices and walked away with $200 million when the company IPO’ed.
But for every success story, there’s hundreds of tech companies that fail. For many startup employees who trade lower cash compensation for higher equity components, Mr. Smith’s offer seems very attractive. “I’m not sure if our company is ever going public and we’re burning piles of cash. Like literally, our business model consists of stacking dollar bills and setting them on fire, but we’re somehow we’re considered valuable enough to be a unicorn,” said one tenant. “I can’t leave because I can’t afford to exercise my options and there’s still the chance that they’ll be worth a bunch, so I thought I might as well use some of it to pay my rent.”
After a few months of experimenting with the stock in another property he owns, he now owns stock in heavy hitters like Uber, Airbnb, Dropbox, as well as a smattering of smaller startups. While most of his holdings are not yet liquid, he is undeterred. “I’ve got a lot of tenants who work at different places, so I have a relatively diverse portfolio. Maybe some of these stocks will be worthless some day, but one or two of them will probably go big and make up for the rest of them. It’s not like ALL tech companies are grossly overvalued, right?”