Both coasts deliver talent and customers. In 2025 the question is where a founder gets faster momentum on the same dollar of runway.
Capital and founder density
California still leads venture by a wide margin. In 2024, California logged nearly 4,400 VC deals, while New York recorded about 1,863. That gap shows up in day-to-day intros, operator angels, and early customers who expect to try new products.
Taxes that change your take-home
California has a progressive state income tax up to 12.3% plus a 1% mental health surcharge on income over $1M, with a new uncapped payroll tax that pushes effective rates higher for top earners. Every California LLC or corporation owes the $800 minimum franchise tax each year.
New York founders pay state income tax up to 10.9% and, if they live in New York City, an additional city income tax up to 3.876%. Unincorporated businesses in NYC also face a 4% UBT at the entity level, with a partial resident credit.
QSBS treatment matters on exit. California does not conform to the federal Section 1202 exclusion, so state tax may still apply to QSBS gains. New York conforms, so eligible sales can be excluded at the state level.
Cost of living and salary pressure
NYC is the priciest rental market right now. As of August 2025, median rent across NYC listings is about $4,380. San Francisco sits around $3,415. That difference compounds into hiring and runway choices for seed-stage teams.
Incentives and ecosystem signals
California’s CalCompetes program is active again in FY 2025-26, with hundreds of millions available in negotiated tax credits for companies creating jobs in-state. New York is investing in AI infrastructure through the Empire AI consortium and its new supercomputing phases.
If you want, I can turn this into a printable checklist page for Foundry’s blog and link to the City and state forms directly.
Who wins in 2025
If your wedge depends on developer adoption, frontier AI talent, or Bay-area enterprise buyers, California still compounds faster. If your buyers sit in finance, media, and national consumer brands with heavy East Coast density, New York delivers access and conforms on QSBS. Either way, model taxes into your equity offers and salary bands early.
A San Francisco base that helps founders move faster
If you choose San Francisco, build in community support from day one. Foundry is a coliving community for startup founders with weekly masterminds, investor dinners, and simple pricing that bundles utilities and cleaning. The house is designed for deep work and quick prep before pitch meetings.
