Dear SaaStr: Should I Move My Start-Up to SF Bay Area?
The SF Bay Area is still the epicenter of B2B and tech.
And AI has made it … even more so.
Even as the world has gone more remote and distributed, there are unique advantages to being based here—especially for startups that want to build something really big.
Here’s the rationale:
#1. Unmatched Density of B2B Talent
The Bay Area has the highest concentration of SaaS founders, executives, and veterans who’ve scaled companies to $100M+ ARR, IPOs, and beyond. This density creates a network effect—you’re surrounded by people who’ve done it before and can help you shortcut mistakes. Whether it’s hiring a VP of Sales who’s scaled a team to $50M ARR or finding a product leader who’s built enterprise-grade solutions, the talent pool here is unparalleled.
#2. Access to Capital
The Bay Area still has more VCs, and more aggressive ones, than anywhere else. These VCs are not just writing checks—they’re optimizing for billion-dollar outcomes. They’ll pay higher valuations and take bigger risks on ambitious startups. While you can raise seed rounds over Zoom, Series A and beyond often require in-person relationships, and being local makes it easier to build those connection.
#3. Proximity to Partners and Customers
If you’re in B2B, many of your key partners—Salesforce, LinkedIn, Google Cloud, Snowflake, Databricks, Stripe, OpenAI, etc.—are headquartered here. Being close to them means easier collaboration, faster partnerships, and more visibility. If your competitor is a Lyft ride away from Salesforce and you’re not, you’re at a disadvantage when it comes to building those relationships.
#4. Legitimacy and Credibility
Being based in the Bay Area still signals legitimacy, especially when selling to enterprise customers or raising capital. For better or worse, there’s a perception that Bay Area startups are more ambitious and better positioned to scale globally. Even customers in London or New York often view a Bay Area HQ as a sign of credibility. This is minor but still a plus.
#5. Accelerated Learning and Feedback Loops, And So Many Peers
The Bay Area’s ecosystem accelerates learning. You’re surrounded by so many other B2B founders and operators who are constantly sharing insights, whether it’s at meetups, events, or over coffee. This shortens feedback loops and helps you iterate faster on your product, go-to-market strategy, and more.
#6. Network Effects
The Bay Area’s network effects are real. From hiring to partnerships to fundraising, being here makes it easier to connect with the right people at the right time. For example, if you’re looking for a VP of Marketing with experience scaling a B2B company from $10M to $50M ARR, you’re more likely to find them here than anywhere else.
#7. It’s Still the Hub for B2B and SaaS. And Now Of Course Also AI.
Weighted by market cap, 80% of public SaaS companies are still headquartered in the Bay Area. And almost all the AI leaders are here as well. While other cities like New York, Salt Lake City, and Atlanta are growing, the Bay Area remains the hub for SaaS innovation and growth. If you’re aiming to build a category leader, being here gives you an edge.
#8. You’ll Need Every Advantage to Scale
Scaling from $10M to $100M ARR is brutally hard. Being in the Bay Area gives you access to the resources, talent, and networks you’ll need to make that leap. While you can succeed elsewhere, the odds are still higher here—especially if you’re selling into tech or partnering with other B2B and AI companies.
#9. The Intensity Will Push You
There is nowhere remotely as intense as the SF Bay. That can add your to your stress, and add to your workload. But it’s a far more competitive world today than just 12 months ago.
That said, the Bay Area isn’t for everyone. It’s expensive, competitive, and not every startup needs to be here. But for a high-flying B2B startup with big ambitions, the advantages often outweigh the downsides.
A few reasons though perhaps … not to come:
#1. You Have Access to A+ Local Engineering Talent
If you can recruit the best of the best in London, Paris, etc. … you will likely lose that advantage in SF Bay. It may still make sense for one founder to come, but a true advantage in local talent is a huge leg up.
#2. None Of Your Customers or Partners are in SF Bay
In eCommerce, parts of fintech, and certainly many slices of vertical SaaS, your industry and crew just isn’t in the SF Bay. Great founders and the epicenter of AI still are. But if you are in a vertical with limited customers and partners in tech, the advantages are lessened.
#3. Time Zone Headaches With Europe, Etc.
This isn’t a reason not to come to the SF Bay, but it’s a real issue. The time zone difference from NYC with a European team is manageable. From California? It’s too far for you to be on the same team & same page. It’s just much harder to manage.
Many use a rough “+3 time zone“ rule to measure how effectively even a distributed team can be a pod and work in sync. California to Europe is just much more than +3 times zones.
#4. Cost of Living
It’s expensive to live in SF Bay.
