more than 55,000 global customers, including marathons, recreational sports leagues, campsite reservations, hunting and fishing licenses, and company conferences, meetings, and retreats. The company went public in 2011. At the end of 2012, the Active Network had more than 3,000 employees around the world, according to its annual report, including more than 700 at its San Diego headquarters.
So far, there is no external indication of Vista Equity’s plans. All three San Diego companies continue to list San Diego job openings on their respective websites, and commercial real estate executives said they were unaware that Vista Equity was laying the groundwork for a move.
“I really hope that it’s not true, because it really would be a shame for those core software capabilities to leave San Diego,” said Jeb Spencer of TVC Capital, a San Diego private equity firm that specializes in software deals.
Nevertheless, such a move makes sense, Spencer said.
“The resources here are beyond expensive,” Spencer said. “We know the tax structure [in California] is unfavorable to business and individuals, and I imagine their margins would improve 10 percent by making the move.” In Texas, Spencer added, “The rent is less, taxes are less, and I’ll bet salaries would be 30 percent less expensive there.” (Texas has no individual or corporate income tax; corporate income tax rates in California vary from 1.5 percent to 10.84 percent, depending on the type of corporation.)
Jeff Lunsford, a longtime San Diego software executive who is now CEO at Tealium, a San Diego startup that provides a Web platform for managing Javascript tags, said he doesn’t see it that way. “We clearly believe San Diego and California are great markets for building high-tech, high-growth startups,” Lunsford said. “We’re certainly growing here and we’re able to find great people here.
“I don’t want to say anything about Texas,” Lunsford added. “It is a great market, and it does have a great tax structure. But I’m not sure it makes that much difference when you have a high-tech, high-growth startup, because they’re not making money anyway.”
David Marino, executive vice president of the San Diego commercial real estate company Hughes Marino, said the departure of three well-established software companies would be “unfortunate, but it wouldn’t be catastrophic” for the commercial real estate market here.
“I have been hearing a lot of concern from employers these days about the difficulty in hiring smart, hard-working people,” Marino said. “We’ve got a number of companies that are looking to hire 100 or more people next year, and they’re kind of scratching their heads in terms of where they’re going to find them. This would certainly put a lot of those high-quality employees back on the market.”
Spencer also noted the departure of three of San Diego’s biggest software companies could have a huge impact on the ecosystem for software startups in San Diego. That would depend, though, on the number of senior engineers and executives who decide they would rather stay in San Diego than move to Texas.
