In November blist moved into a nice new office suite in Pioneer Square. Before that we subleased some office space in Kirkland. We took our first office 2 weeks after incorporating and 2 weeks before our first employee joined. The company was entirely self-funded by me.

There’s a lot of talk that startups can and should operate virtually instead of taking an office. I couldn’t be more strongly opposed to the idea. In fact, I think an entrepreneur should take an office even before the first employee is hired, or worst case coincident with the first employee joining. I know my opinion isn’t unanimously supported, but I thought it’s worth sharing my thoughts as both an entrepreneur and angel investor. Here are some of the reasons why I think taking an office should be an early priority:

*) Paying for an office is a forcing function that clearly draws an end to the pre-startup “I’m thinking about it” phase and commences the “I’m all in” phase. There’s something about having your name on the roster in the lobby and a sign outside your door that says you’re serious about making a go of it.

*) There is no substitute for face-to-face collaboration. Yes, tools like email, IM, Skype, cell phones and Basecamp are great. They play a role in startups, but they can’t replace in-person collaboration. I can count somewhere between 5 and 10 entrepreneurs who started virtually then took an office who have shared with me “We should have taken an office much earlier. It was such a boost to productivity.”

*) Your ability to attract key people is limited by not having an office. Sorry, we’re not all wired the same. Some of us don’t want to work out of your spare bedroom. I don’t have any evidence to support this, but I think this is an even bigger issue when trying to attract the opposite gender into your startup.

*) Your ability to capitalize your business is severely hampered by not having an office. This opinion isn’t anecdotal. A number of VCs have flat out told me they won’t invest in virtual companies. Remember, an office visit is part of the process for raising capital from a VC. For angels, I think it’s more along the lines of my first point. “How serious are you if you still won’t even spend $1,000 a month for an office?”

*) Finally, the ROI on an office pays for itself. I simply believe that you get more than $1,000 a month of productivity gains by spending a $1,000 for a small office.

OK, so I’ve convinced you. Now what? How do you go about finding an office? I’ve successfully subleased twice before and highly recommend it. It’s a great way to find affordable space with very flexible terms. Avoid executive suites. They are a horrible value and they nickel and dime you for everything. For blist, I found an 8-month sublease on Craigslist which I negotiated down to about $10 per square foot. The going rate for a direct lease in that building is $32 per foot. For MessageRite, I called a friend of mine with a consulting business and learned they had 4 or 5 empty offices. I worked out a deal to pay $600 for the first one and then $300 for each additional one as we grew. We were able to use the conference room and have some space in the computer room for our equipment. It was a great.

If you’re serious about building a real business, start by getting a real office.