Software company Snowflake has moved its executive office from San Mateo to Bozeman, Montana, becoming the latest tech company to relocate part of its operations from the Bay Area.

San Mateo Mayor Eric Rodriguez believed the Snowflake decision would not affect the local economy immediately.

“As far as I can tell, they have indicated that they plan to keep a large part of their operations still in San Mateo. I think it’s important to keep the announcement in perspective because, in the short term, I do not anticipate the decision to have a practical impact on our local economy,” Rodriguez said.

A Snowflake spokesperson said in a statement that Snowflake was a Delaware corporation with no corporate headquarters and a global workforce.

“Under the Securities and Exchange Commission’s rules, we are required to designate a ‘principal executive office.’ For this purpose, we have designated our office in Bozeman, Montana as our principal executive office, as that is where our chief executive officer and chief financial officer are based.

While San Mateo continues to remain an important location for us, we do not have a single office that is at the center of Snowflake’s operations. We will continue to concentrate hiring in specific regions that optimize for talent pool, growth, cost, access to universities, technical talent, and other factors.”

Snowflake is a cloud-based data warehousing startup founded in San Mateo in 2012 by Marcin Zukowski, Benoit Dageville and Thierry Cruanes. Since its founding nine years ago, the company has grown from a small startup to a company that raised $263 million in January 2018 and now employs hundreds of people. The company made its initial public offering in 2020. Salesforce, a Bay Area cloud company, and Warren Buffett’s Berkshire Hathaway each bought $250 million in Snowflake stock in private placements following the IPO. Snowflake still maintains an office on Concar Drive, which it stated remains an important location. Customers include startups that use Snowflake’s data infrastructure on the cloud to more established companies moving data. Snowflake’s customers include credit card companies and media and entertainment enterprises.

Several large companies and businesses in the Bay Area have recently decamped to other states. Oracle in December announced it was moving its corporate headquarters out of Redwood City to Austin. Hewlett-Packard announced last year it was moving headquarters from San Jose to Houston. Venture capitalist Tim Draper, founder of Draper University based in San Mateo, recently announced he was considering moving to Austin.

Rodriguez believes Snowflake enjoyed being in the city and was part of the community. However, he noted the Bay Area did have an astronomical cost of living, especially with housing and child care, high state tax rates and not as friendly business environment when compared to Austin, Denver or Bozeman.

“I am concerned about the underlying factors that are driving successful companies elsewhere,” Rodriguez said.

He noted many companies are likely looking at if it makes sense to stay in California, and while many would stay, others would unfortunately leave. Rodriguez is a business owner and didn’t think California’s top priority at the moment was keeping business in the state, with more focus on things like the cost of living. He noted the Bay Area was an expensive region to live in and a challenging environment for welcoming businesses.

“I think as we see more and more companies leave, it’s eventually going to end up hurting the state’s tax revenue. Until we start feeling that pain and recognizing that we need more policies that are designed to keep businesses here, I think we are going to continue to see this trend,” Rodriguez said.

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(5) comments

Terence Y

We already have people moving out of CA due to the harsh regulatory and tax environment so why should we be surprised companies are moving out? If public companies cannot maximize shareholder value they’ll cease to exist. It only makes sense for companies to move out of states that don’t welcome them and reduce shareholder value. This trend will continue as people and companies, along with employees, continue to move to welcoming environments.


At present, the issue appears to be the CEO and CFO moving out of CA, and per SEC rules that means the HQ is Montana. I faced something similar with my small business, in that CDTFA informed me that my small business is properly regarded as San Mateo County based, because that is where I live. Certainly it would be a better post-tax answer for corporate employees to be in, say, Nevada, where there is no personal income tax (ie, their equity compensation in the form of RSUs which give rise to ordinary income taxation upon vesting in states like CA). So move them to Nevada, where their salaries, equity etc. is not subject to State personal income tax. They can use the extra post-tax income for boats etc. Shareholders are taxed when receiving dividend income and realizing short-term and long-term capital gains. Large shareholders of typical multinationals may have portfolios of realized short and long term capital gains AND losses each year, along with dividend income. While their investments may be CA companies to some extent, these large shareholders may be domiciled in places like NJ, CT, etc. or even internationally where the ultimate taxation is ex-California. I freely admit that some large shareholders may be CA based, but I hazard to guess they routinely use tax and other hedges to mitigate against tax impacts. Smaller shareholders like 401k investors may not even face any tax, if they wait until retirement to use the cash from investment in companies. Also, while CA companies certainly face CA income tax subject to income nexus to CA, large multinationals also benefit from periods of political change where cash repatriation from foreign territories is treated at a lower tax rate for a defined period of time, given rise to smoothing out temporally high US Federal marginal tax rate impacts, viewed over the long term (and the long term is what matters, as equity market valuations are typically largely driven by the 'terminal value' of the Free Cash Flow forecast). Companies such as Snowflake also invest large amounts of venture cash in early phases (which is great), which gives rise to US Federal and CA state net operating loss carryforwards, which reduce tax obligations down the road. Per their SEC filing, Snowflake as of January 31, 2021, had U.S. federal and state net operating loss carryforwards of $1.9 billion and $1.4 billion, respectively. Of the $1.9 billion U.S. federal net operating loss carryforwards, $1.8 billion may be carried forward indefinitely with utilization limited to 80% of taxable income, and the remaining $0.1 billion will begin to expire in 2031. The state net operating loss carryforwards begin to expire in 2024. So I am not sure the CEO and CFO are living in Montana for overall tax reasons as it relates to corporate taxes and shareholder value issues. Certainly a software company may face regulatory burdens in any state eg, HR, energy usage, etc. But what concerns me most, as a San Mateo resident, is overbuilding over the past ~5 years (perhaps based on proffered corporate headcount projections to the City? I'm not saying this happened - I have no facts - just wondering), which gives rise to a host of issues for residents. Then, the companies--or key executives--seek other places to live because they don't want to live among the negative results (crowding, traffic, increasing student-teacher ratios, higher gas prices, etc.) of the overbuilding. And like any good forecaster, people start to estimate the long-run impacts, flee for personal tax arbitrage, and leave the City of San Mateo with financial issues down the road. There is not one person sitting in any US State who should believe it is simply to move to the San Mateo area, and live in the best neighborhoods with the best schools unless you are extremely wealthy. We knew, as 1980s high school graduates in the San Mateo area, it was simply NOT even available to us.


My preference would be for senior executives to stay in California and tackle the problems head on; being honest about the differences between pre-dot-com Bay Area and the Bay Area of today as it relates to societal fabric, an engaged workforce, sense of community pride and spirit around the broad range of the citizenry, and civic responsibility as an owner/operator of a business that uses incentives wrapped around political bodies. It must be nice to just move on to Montana, enjoying the flexibility while your losses widen and the SF Bay Area deteriorates. For many of us, we would just rather stay here and face the problems and offer solutions, even if it draws the ire of the wealth class.


Also, I just have to ask: Did we lose the view of the San Mateo mountains on westbound Concar Drive forever, just so wealthy executives could go enjoy the mountains in Montana?


On one hand I agree with you on the other hand bay area politics have been a disaster for so long that it's hard to see a light at the end of the tunnel. And there's a lot of anti tech sentiment so I think tech companies generally try to stay out of politics. But I wish they wouldn't. We should all be working together to make things better.

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