Keeping the Faith in Silicon Valley

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The dynamic of Plug and Play was on display one recent Friday morning as some 25 investors and interested executives watched entrepreneurs give 10-minute presentations in hopes of attracting investors or partners. A Princeton student in sandals, T-shirt, shorts, and a backward-facing cap breezed through a PowerPoint presentation on a screen. His company, ExhiBytes, aims to enable buying and selling of art through Facebook by analyzing people's social connections as well as the artwork they mark as favorites on their Facebook profile page. "Favoriting is the key to virality," he said. That a guy in flip-flops can get serious attention from potential investors reveals that the recession has hardly vanquished the hopes of entrepreneurs and venture capitalists.

EXECUTIVE REPURPOSING

Plug and Play isn't immune to the recession. Tenants note more vacancies than during better times. But Amidi has managed to turn the poor economy to his advantage: The facility has become a way station for executives between jobs. "Executives in residence" also pay $500 a month for a cubicle and agree to meet at least 20 startups, some of which they mentor.

Most of the executives eventually find jobs, often with companies in the center. Former Yahoo! (YHOO) Vice-President Jitendra Kavathekar "felt like a kid in a candy store" before choosing to become CEO of Plug and Play tenant Twiki.net, which provides corporate collaboration services. He plans to keep the company there at least until its next round of funding.

Although Plug and Play's real estate revenues are flat, things may be picking up. Amidi says June was his best month ever, thanks to the addition of 30 new tenants. He's even expanding—a lot. In July he opened similar facilities in Los Angeles, where he already owns Hollywood production centers where Fear Factor, Deal or No Deal, and other TV shows have been filmed. He aims to have 50 tech and media startups there by yearend.

But Amidi's ambitions go beyond being a landlord and part-time investor. He wants to beef up his services so he can get more involved with the most promising startups. "The real estate part is good," he confides after one of Plug and Play's customary Friday afternoon barbecue lunches. "But the real money is if you can invest in the next Google or PayPal."

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Hof is BusinessWeek's Silicon Valley bureau chief.

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