STARTUP CEO: Here's Why I'm Moving My Company From A State With Low Taxes And Regulations To California

Kane HsiehRomotive co-founders playing with the robotFor about a decade now, people have been slamming California as being one of the least business-friendly states in the Union.

The refrain goes something like: taxes are too high, Sacramento too dysfunctional, pollution (in SoCal, at least) too suffocating.

And there was definitely something to this. The state did have to issue IOUs, and set records days without a budget.

The talk recently heated up when Texas Gov. Rick Perry aired a series of ads across California touting his state’s lower taxes and more favourable regulations.

But one tech CEO says that for his industry, there remains no alternative to the Golden State.

Last month, Las Vegas-based robotics company Romotive announced it was picking up stakes to move somewhere in Silicon Valley (they haven’t narrowed down exactly where yet).

Keller Rinaudo, the company’s founder, spoke to us via Skype late last week to explain the decision to move from a low tax state to a back to California.

He said he actually agreed with the critiques folks like Perry have made, to a point.

“It was not a short-term economic decision,” he said. “California is one of the most friendly and unfriendly business environments in the world.”

The company anticipates more taxes and higher cost of living, he said.

But to achieve their goal of building the world’s first affordable personal robot, they had to be on the West Coast.

We have to find experienced roboticists, and that really only exists in a few places in the world, and California is one of them.”

It’s not limited to robots. Many startups crave the engineering talent pool coming out of places like Stanford, he said.

And for tech, the Valley is still where the money is.

“I know lots of other tech companies that end up moving to the Bay Area, I think in a lot of cases though it has to do with needing investment. We’re backed by a lot of really strong investors, and then finding proximity to a research centre…We’re building robots, not building an e-commerce store.”

MIT and Carnegie Mellon have the talent, he said, but Boston and Pittsburgh lack the startup community that’s flowered in and around San Francisco.

Rinaudo said he’s spoken with lots of other firms already in the area to try to narrow down exactly what town they want to be in.

“There are lots of startups in the Bay Area who are approximately our size who were super helpful about opening their financials, giving us a sense of going into it with eyes wide open.”

Bottom line is this: For all the talk about taxes and trying to lure dynamic companies out of the state, it’s really hard for other places to match the Silicon Valley talent and money community. And for dynamic companies there’s just no substitute for that.

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