Ex‑Coinbase CTO warns California billionaire tax could dismantle Silicon Valley’s VC model

Beincrypto reports that Balaji Srinivasan, former Chief Technology Officer of Coinbase, warned that taxation and regulation could collapse Silicon Valley’s venture capital model, writing that “there is a scenario in which Silicon Valley could literally go to zero in the next ten years.” Srinivasan singled out California’s proposed 2026 Billionaire Tax Act — a ballot initiative that would impose a one‑time 5% excise tax on individuals with net worth exceeding $1 billion — and argued it would strike at the “power law” economics that underpin startup funding.

“No prospect of billionaires means no angel funding means no Silicon Valley,” he said. Legal firms, including Baker Botts, have flagged extensive constitutional vulnerabilities in the proposal, while PwC estimates it could raise roughly $100 billion if approved in November 2026. He framed the threat as broader political risk affecting property rights, stock compensation, visas, IPO pathways and regulatory treatment of technologies such as AI and crypto, and said hostility now comes from both sides of the political spectrum.

Srinivasan noted some founders have relocated to Texas, Miami, Dubai or Singapore, but warned most companies remain deeply embedded in California, Delaware and New York — jurisdictions he describes as increasingly hostile to concentrated tech power.