Every tech IPO filing uses the same word to describe Silicon Valley hiring: 'intense'

San Francisco is one city favored by college graduates.
Avinash Achar | Getty Images

Okta's successful IPO on Friday marked another win for San Francisco's technology industry, which has exploded in the past decade with new software and internet companies.

But Okta's location is a blessing and a curse.

Buried in the risks section of the software developer's prospectus is language that now shows up in every IPO filing for Bay Area companies.

The non-legal version would say something like: "engineers around here are expensive and flaky."

Here's the actual wording:

"Competition for these personnel in the San Francisco Bay Area, where our headquarters is located, and in other locations where we maintain offices, is intense, especially for engineers experienced in designing and developing software" as well as for salespeople.

Intense is the word of choice.

Cloudera, which sells software for big data projects, is the next notable name on the IPO docket. The company, based in Palo Alto and with an office in San Francisco, said "competition for highly skilled personnel is often intense, especially in the San Francisco Bay Area where we have a substantial presence."

How about MuleSoft? The provider of a platform for connecting applications went public last month. MuleSoft told investors that, "competition for highly skilled personnel is intense, particularly in the San Francisco Bay Area, where our headquarters are located."

Bay Area tech IPOs

Debut dateCompanyHQ
4/7/2017OktaSan Francisco
3/17/2017MuleSoftSan Francisco
10/6/2016CoupaSan Mateo
9/30/2016NutanixSan Jose
6/23/2016TwilioSan Francisco

AppDynamics, which was supposed to go public earlier this year until it was acquired by Cisco, took it one step further saying local competition for talent is "intense and often leads to increased compensation and other personnel costs."

Filings last year from Twilio and Coupa also used the word intense to describe the hiring environment, with Coupa adding, "job candidates and existing employees in the San Francisco Bay Area often consider the value of the stock awards they receive in connection with their employment."

With more than half of all venture capital funding targeted at start-ups in California, hot tech companies are vying for talent with each other as well as industry giants Google, Facebook, Apple and Salesforce.

Employees certainly need more money than they do elsewhere. According to Coldwell Banker, the 11 U.S. cities with the most expensive housing prices are in California, and six of them are in the 50-mile stretch between San Francisco and Los Gatos.

Long history

IPO bankers have described competition for talent as intense since long before Okta was even formed in 2009.

Salesforce, the former employer of Okta CEO Todd McKinnon, said in its 2004 prospectus that, "competition for these personnel is intense," referring to engineers and salespeople.

Tech unicorn Okta makes public debut on Nasdaq

But unlike today's companies, Salesforce didn't call out Silicon Valley. Nor did Google ahead of its IPO the same year. The internet search provider told investors just how aggressively rivals were coming after its programmers.

"Competition in our industry for qualified employees is intense, and we are aware that certain of our competitors have directly targeted our employees."

More recent IPOs have specified the Bay Area's challenges, a trend that's unlikely to change anytime soon. Uber and Airbnb, both headquartered in San Francisco, are still private, along with other high-fliers like Stripe and Slack. Venture money continues to flow.

Okta's debut certainly won't do anything to slow the market. The stock surged 38 percent on its first day of trading to close at $23.51.