Report: 96.9% of Bay Area tech startups remained in the region in 2020; of those that moved, 21% moved to New York, 21% to other parts of CA, and 12% to TX
- A survey from Telstra Ventures shows that the majority of startups stayed in San Francisco in 2020. Tweets: @producercities , @jaycuthrell , and @abrams Tweets: Jim Russell / @producercities : Pittsburgh shows up in two top-10 tables for VC investment growth: “Tech's Great Migration: Insights to Emerging Tech Hubs Across the US” https://telstraventures.com/ ... https://twitter.com/... Jay Cuthrell / @jaycuthrell : Patiently awaiting the survey that digs into the truly burning question we're all asking: What percentage of Bay Area startups moved from studio and one bedroom offices into arguably more affordable two bedroom offices with more natural light on the other side of the building? https://twitter.com/... Jonathan Abrams / @abrams : Reports of tech companies leaving Silicon Valley ‘greatly exaggerated’ https://www.businessinsider.com/ ...
Context & Ripple Effects
When tech giants rolled out new work-from-home guidelines and floated salary adjustments in mid-2020, the assumption was that startups would follow their employees out of San Francisco. Telstra Ventures' survey cuts against that narrative: 96.9% of Bay Area startups stayed put through 2020.
The small minority that did move split between New York (21%), other parts of California (21%), and Texas (12%) — a destination list that looks more like incremental relocation than a wholesale flight to Miami-style boomtowns.
First-order effects
- The 'startup exodus' framing that dominated 2020 coverage takes a direct hit: founders largely kept their companies where their networks, investors, and talent pools already were.
- For the cities courting relocating startups, the addressable market is far smaller than headlines implied — only about 3% of Bay Area startups moved at all.
Second-order effects
- Emerging hubs still gained at the margin: PitchBook later showed Silicon Valley's US venture share falling to its lowest since 2012, with NYC raising $29.5B and Miami growing 278% from 2020-2022 — consistent with a thin but real outflow rather than none.
- Remote-work-era bets on dispersed teams didn't erase the premium on proximity; by 2021 workers were trickling back as Twitter reopened its SF HQ and Google planned expansion.
Third-order effects
- If the pattern holds, startup geography changes by erosion, not migration: incumbents like the Bay Area lose share points slowly while secondary hubs compound from a small base.
- Agglomeration proves durable enough to reverse itself when a new technology wave hits — the 2024 AI boom pulled investors and founders back to San Francisco — suggesting hub concentration is cyclical rather than broken.
The trend: Startup location is proving far stickier than pandemic-era remote-work rhetoric predicted, with the Bay Area ceding venture-share points gradually rather than emptying out.