- The Google Factor
- Hedge Funds and Trickledown Capital
The Google Factor
“With starting salaries approaching $175,000 range, the choice of starting a business or going to Google is getting tougher” – Tim Draper
We’ve talked about the cost of acquiring talent in Silicon Valley versus Toronto. The price of talent is much lower north of the border. Canada has a greater percentage of technical talent available and is graduating more engineers than the US. And with payscales in the $58,000-$77,000 range, it’s a lot cheaper to acquire talent in Toronto than the Valley. One of the open questions for me is does the available talent have the appropriate experience, skill and risk tolerance to build successful startups.
I don’t know a lot about hedge funds. I don’t know how they operate or their direct impact on the tech sector. But it’s not the first time that this has come up in observation and not everyone is in agreement about the role that money plays in starting up. This is a very different problem than the problem that exists north of the border.
- Startups turning to Hedge Funds
- Using Hedge Funds for Startups
- Hedge Funds, Venture Capital, and the 25% Solution
- Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets
Sarbanes-Oxley is adding costs for startups to go public, approximately $3M according to Draper, and this is delaying the IPO exit window for early-stage investors. The regulatory and economic challenges imposed by Sarbanes-Oxley are similar to the taxation challenges experienced in Ontario and Canada by early-stage investors. Regulatory issues aside, there has been a huge market for acquisitions and I’m wondering if that is a direct result of 2 of the above observations. Companies are being acquired for their talent and the costs of going public have created a stronger market for acquisition by the big players.
Starting companies is hard.