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Venture Capital Cities Startups

Bay Area’s High Costs Drive Away Some Tech Firms

Jeff Cavins employed many typical Silicon Valley tactics as he tried to grow his new company. The startup Outdoorsy—which helps people rent out their RVs to other travelers—got into a Palo Alto-based accelerator, raised more than $25 million in venture capital and eventually showed hints of success with $150 million in gross sales last year.

This year, he tried something more unusual. He moved the company’s 28-person San Francisco headquarters to Austin, Texas, to save money and get closer to customers. He expected to lose employees who would want to stay behind. But nearly everyone, from engineers to marketers, decided to move to Austin, too.

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