Just about every piece of computer technology we use can trace its origins, at least in part, to a section of San Francisco’s Bay Area known as Silicon Valley. It is so named after the semiconductor upon which many of its most successful products is based: silicon.
Some of the world’s biggest names make their home here. But it’s also a draw to some exciting new disruptors, whose impact on the world in recent years has been nothing short of breath-taking.
Why is Silicon Valley a haven for tech?
For more than a hundred years, this part of California has been a centre for innovation. The first ship-to-shore wireless telegraph was received here, to signal the end of the Spanish-American war. The area went on to become home to 10% of the country’s ham radio operators.
In 1891, Stanford University was established here – and it’s played a major role in attracting tech-savvy talent to the region throughout its lifespan. A whole slew of technological milestones have been reached in this part of America, including silicon transistors, integrated circuits, computer mice and laser printers.
Silicon Valley’s status as the place to be for technology companies is also self-reinforcing. The fact that so many giants of the tech industry are within walking distance of one another means that there’s an abundance of talent available. Labour is mobile, and can switch from one company to another, which raises the overall standard of talent.
What are the advantages for newcomers?
If you’re starting a business having graduated from Stanford along with a few other like-minded collaborators, then Silicon Valley is an obvious place to set up shop. But what about tech entrepreneurs who are arriving from elsewhere in the world?
Entrepreneurs and venture capital firms in the area benefit from the QSBS (or Qualified Small Business Stock) to mitigate their tax obligations. Companies with assets of $50 million or less are eligible for shares of this sort: if they are held onto for more than five years, they can avoid taxes when selling.
This incentive creates an environment where new start-ups can easily secure the investment they need.
One of the major obstacles for newcomers is the high cost of living in the bay area, where skyrocketing salaries for tech executives, and a more widespread explosion in jobs in the area, have not been matched by a proportionate increase in new homes.
The prospect of having to contend with the unfamiliar laws of the state (and the wider country) might be enough to dissuade many would-be tech entrepreneurs. Investing in the services of a competent tech lawyer like Withers will help to ease this transition.