Re:Silicon Valley exodus: Bay Area tech companies leaving fo...
by Retric on Tuesday December 15, 2020 @05:10PM
(#25435887)
That a 9% income tax in California corporate tax rates are on profit. A profitable startup has unlimited runway so the classic X month of runway company is facing ~0 income taxes.
Further it assumes your capital constrained, which might apply to some fast growing business but if your the magical unicorn of a profitable fast growing growing company then capital is the easiest problem to solve. Worst case you might trade a little extra equity, but again that’s linear dilution often based on growth at the current rate.
PS: If your growing 10% per month it takes 6 years to go from 1 million per year in revenue to 1 billion per year in revenue. It’s very fast, but hardly instantaneous. Keeping that up for 12 years means 1 trillion in revenue per year which is extremely rare. Growth will slow eventually, and when it does there are a huge number of things to optimize.
Further it assumes your capital constrained, which might apply to some fast growing business but if your the magical unicorn of a profitable fast growing growing company then capital is the easiest problem to solve. Worst case you might trade a little extra equity, but again that’s linear dilution often based on growth at the current rate.
PS: If your growing 10% per month it takes 6 years to go from 1 million per year in revenue to 1 billion per year in revenue. It’s very fast, but hardly instantaneous. Keeping that up for 12 years means 1 trillion in revenue per year which is extremely rare. Growth will slow eventually, and when it does there are a huge number of things to optimize.