San Francisco is expensive. Like, really expensive.
Silicon Valley’s housing situation has gotten so bad that Facebook this week pledged $1 billion to help fix California’s affordable housing crisis. (You might have missed the announcement, but it came a day before CEO Mark Zuckerberg had an awkward time before the House Financial Services Committee.)
The rising costs of Silicon Valley have contributed to a sense for many that maybe it’s time to move. Forty-one percent of 18- to 34-year-old tech workers surveyed by Brunswick earlier this year said they plan to leave the Bay Area in the next year.
One potential destination for those folks leaving the Valley: Austin, Texas.
The city is now home to a booming startup scene with healthy competition among venture investors. But it wasn’t always so. As Megan Hernbroth reports, it wasn’t until Austin Ventures’ $900 million VC fund folded that Austin’s tech scene flourished.
Megan also talked to investors to identify the 11 hottest startups from Austin’s booming tech scene to watch in 2020, and profiled Austin’s top VCs giving Silicon Valley investors a run for their money.
I’d love to hear from you. Could there be a real alternative to Silicon Valley in the next decade? Where should our startup reporters spend time next?
WeMade A Decision
WeWork employees learned that SoftBank that would be bailing out the coworking company from a Wall Street Journal report on Tuesday morning. As details of how cofounder Adam Neumann would fare in the deal emerged — the founder will be able to cash out $1 billion and get hefty consulting fees — current and former staff told Meghan Morris they were outraged.
Later that day, Meghan reported on WeWork’s all-hands meeting, where Marcelo Claure, the new chairman from SoftBank, addressed employee concerns about worthless stock options and Kanye West’s ‘Flashing Lights’ played. (You can read the internal email from Claure where he confirms layoffs and says the company is lacking “focus” and “accountability” right here.)
WeWork may have picked SoftBank’s bailout over JPMorgan’s rival financing package, but it was hardly wasted work for the Wall Street bank. Dakin Campbell revealed that JPMorgan would receive a fee of about $50 million for assembling a group of investors to lend $5 billion to WeWork, even though the coworking company didn’t select that bailout option.
And on other side of the Atlantic, Shona Ghosh published the inside story on the collapse of Faraday Grid, the ‘$6.5 billion’ energy startup backed by Adam Neumann, complete with allegations of bullying, $1,000 pens, and a celebrity chef.
I’m very happy to welcome two new additions to Business Insider:
- Ashley Stewart has joined us in Seattle to cover AWS and Microsoft. This past week she’s been reporting on the technologies Microsoft CEO Satya Nadella is betting on to take the company past its $1 trillion valuation, and why some think Amazon should spin out AWS. She also reported that analysts believe Microsoft has a massive opportunity to overtake Amazon Web Services, just before Microsoft upset the odds to win the huge JEDI contract.
- Paayal Zaveri has joined to cover companies like Salesforce, Slack, and Zoom from San Francisco. She’s been reporting on Slack’s rivalry with Microsoft Teams, and what industry insiders are saying about Google’s hire of Javier Soltero to lead its G Suite division.
Finance and Investing
We found the 40 most powerful investment bankers at Bank of America. Here’s our exclusive org chart.
At a financial conference in September, Tom Montag, the chief operating officer at Bank of America Merrill Lynch, spent the bulk of his time on stage shedding light on the comeback story of the year at his firm — the resurgence of its investment-banking business.
Maverick Capital’s human stock pickers are shining, but quant strategies at Lee Ainslie’s $8.8 billion fund are in the red and lagging their peers
Maverick Capital’s long-running fundamental stock-picking funds have outperformed peers in 2019. Meanwhile, the $8.8 billion manager’s quant strategies are just hoping to break even by the end of the year.
Wall Street has fallen in love with stocks that pay big dividends, and Goldman says they’re still the cheapest in a decade. Here are the 13 the firm recommends most.
Growth is everything on Wall Street, and lately there’s more and more love for one specific type: dividend growth.
Tech, Media, Telecoms
Hot AI startup UiPath just laid off about 400 people — only a few months after raising $568 million at a $7 billion valuation
UiPath laid off about 400 people this week, six months after the AI-software-automation startup raised $568 million, which boosted its valuation to $7 billion.
CIOs say that technology is changing ‘too fast,’ even as the rise of the cloud and the risk of cyberattacks make them more important — and more visible — than ever
The job of the chief information officer, or CIO, used to be pretty boring — a low-profile, slow-paced post focused on running drab data centers tucked away in some remote corner of corporate headquarters.
The Hulu exec leading product placement says its brand integrations rose 200% in the last year and explains how its strategy differs from rivals like Netflix
Bottles of Miller High Life linger on tables and in the hands of neighbors coping with tragedy in various scenes in Hulu’s heavy-hitting drama series, “The Act,” which won Patricia Arquette an Emmy for outstanding supporting actress in a limited series this year.
Healthcare, Retail, Transportation
We got an exclusive look at the slide deck that digital health startup Path is using to sell clients on a new approach to treating addiction
Josh Bruno has now attended five funerals for friends who have died of drug overdoses.
The head of JetBlue’s VC arm reveals which startups the airline is investing in to make travel quicker, greener, and less miserable
Flying can be a headache.
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NOW WATCH: Robots make burgers at this San Francisco start-up backed by Alphabet Inc.