Silicon Valley Funding News - Week of February 1, 2021. Fast Raised $102M Series B led by Addition and Stripe

Is San Francisco losing its mojo?

Accelerated by the pandemic, quite a few prominent tech companies are turning in remote-first, downsizing, and/or moving out of San Francisco and moving to cities like Austin, Las Vegas, Miami, and Seattle:

• Twitter (remote first)
• Square (remote first)
• Brex (remote first)
• Slack (remote first)
• Oracle (moving to Austin)
• Credit Karma (downsizing) 
• Pinterest (downsizing) 
• And many more. 

According to the study by SFciti, San Francisco is facing a budget deficit of $411M for the fiscal year 2021-22. The City's love-hate relationship with big tech has always been there, but why such a mass exodus now?

• Unfriendly tax policies - San Francisco is the first city in the US that passed the “CEO tax” law
• Expensive to live - San Francisco is THE most expensive city to live in the US with a $194K minimum salary (after taxes) needed to afford a house in San Francisco that excludes 70% of tech workers
• 2020 was a banner year of IPOs - Over 120 VC-backed IPOs with a combined $259.8 billion valuation. Many of them are from San Francisco and Silicon Valley including Snowflake, Airbnb, Doordash, Palantir, Unity, etc. 
• 13.3% capital gain - All capital gains in California are taxed as ordinary income compared with Texas, Nevada, Florida, and Washington that have no individual state cap gains tax.
• Women on board requirement - California is the first state to require all publicly held domestic or foreign corporations whose principal executive offices are located in California to have at least one female director on their boards by December 31, 2019. One or two more female directors would be required, depending upon the size of the publicly held corporation by December 31, 2021. This is a great initiative, but might be tough for some companies.

I am still bullish on Silicon Valley as I don't think Berkeley and Stanford will go away.  After all, it's those talents that make Silicon Valley.  Perhaps these tax and corporate policies are too aggressive and turning a tech mecca into a ghost town?

I would love to hear your thoughts. 

This week a total of 25 startups raised $532.9M in funding, 4 M&As:

• $124.5M goes to 7 Enterprise startups
• $98M goes to 3 FinTech startups
• $3.7M goes to 1 Insurance startup
• $10M goes to 1 Crypto startup
• $70M goes to 1 Mobile startup
• $105.2M goes to 2 E-Commerce startups
• $3.5M goes to 1 Food Delivery startup
• $2.5M goes to 1 Real Estate startup
• $4M goes to 1 Gaming startup
• $78.5M goes to 3 Energy startups
• $23M goes to 4 Other startups