Washington’s tech sector is no longer merely bracing for the effects of a harsher tax climate—it is already living with them, according to Aviel Ginsberg, general partner at Founders Co-op. In an interview on The Ari Hoffman Show on Talk Radio 570 KVI, Ginsberg argued that capital flight, investor relocation, and growing anxiety inside the tech workforce are no longer hypothetical concerns. They are active forces reshaping the state’s economy in real time.
“We continue to see the massive capital flight, massive company exodus out of Washington, and it’s only getting worse,” Hoffman said at the start of the segment, setting the tone for a conversation centered on the state’s shifting economic landscape and the growing fear that Washington is losing its competitive edge.
“Have investors left already? Absolutely. Because they can.”
Investor Warns Washington Facing Tech ‘Death Spiral’ pic.twitter.com/UZiKLiANCO
— Ari Hoffman (@thehoffather) March 18, 2026
Ginsberg explained that when he previously appeared on the show, the focus had been on qualified small business stock, or QSBS, which he described as a policy meant “to incent people to start early stage businesses and invest in them.” That proposal, he said, “did not move through, thankfully.” But he added that the broader push for new taxes did move forward, and the consequences are now becoming visible.
“I think what we did know is something was gonna go through,” Ginsberg said. “And what did go through was the income tax.” In his view, those tax changes cannot be understood on their own because they landed on top of existing concerns that had already rattled Washington investors, especially older wealthy backers worried about estate taxes and the long-term policy direction of the state.
For many of those investors, he said, the decision-making process began well before the legislation passed. “They had already done all of the planning work to essentially be like, I know where I’m moving,” he said. “I may have already bought the second home, already bought the vacation home. I’ve done all the planning.”
That planning, he suggested, has turned into action. Ginsberg said one of his largest individual limited partners, someone he described as “sort of the last of the what we call super angels,” had recently left the state. “He’s officially out as of a few weeks ago,” Ginsberg said. “We lost the previous one last year to Nevada.”
For startup founders, that kind of departure matters immediately. Early-stage companies depend on local risk capital, and Ginsberg warned that Washington is losing the very investors who once helped seed the next generation of firms. “If I’m an early stage entrepreneur and I’m saying, where do I get my risk capital?” he said, the answer is increasingly uncertain. The problem, he argued, extends beyond venture-backed software companies. “It’s gonna start being things like, how do I open a pizzeria? How do I open this restaurant?” he said. “There’s gonna be people who are like, the person who would have written you that check, they don’t live here anymore.”
Ginsberg reserved some of his strongest language for those who dismiss the connection between taxes and capital flight. “I know everyone’s like, capital, taxes don’t increase capital flight,” he said. “I feel like I’m taking actual crazy pills.” In his own business, he said, the evidence is showing up plainly during tax season, when Founders Co-op’s investors update their information. Asked how many change-of-address notices he is seeing, Ginsberg answered: “Dude, dozens, dozens. Like, and this is not, like, this is real. This has already happened.”
That, he argued, is the core mistake in the public debate. Too many people are still talking as though they are trying to predict a future outcome, while ignoring what has already changed around them. “We’re still having debates of like what this is gonna do,” he said, “whereas I feel like we live in an echo because what we think still exists around us, the people that we think are still here, the capital that we expect will still come in—not just to our businesses, but to our charities—it’s already gone, man.”
The effects, he said, are not confined to investors and founders. Hoffman pointed to visible changes in South Lake Union and other Seattle neighborhoods where tech-driven foot traffic once supported a network of local businesses. Ginsberg agreed, arguing that many businesses in the region had grown over the past 15 years by serving households making more than $150,000 a year. For a long time, he said, their model was simple: open stores near affluent customers and grow steadily. But that no longer appears to be working.
“There are a lot of businesses in this region that experienced growth over the past 15 years whose target demographic was households making over $150,000 a year,” Ginsberg said. “And those folks have started seeing declines over the past two years.” In many cases, he said, owners are confused because they believe they are doing everything the same way they always have. “They’re saying, hey, I’m doing everything I used to do. Why is this not working?”
In Ginsberg’s telling, COVID masked the deeper trend for a time by creating such unusual consumer behavior that many businesses struggled to make meaningful long-term comparisons. But now, with several years of post-pandemic performance behind them, owners are beginning to see the pattern more clearly. “It’s only now that they’re waking up,” he said, “and they’re like, okay, we now have three real years that we can’t blame on COVID.” The conclusion for many, he suggested, is stark: “Okay, we’re kind of screwed.”
When asked whether people are staying to fight or simply giving up and leaving, Ginsberg said the answer is mixed. Some remain committed to Washington and believe it is their duty to stay. Others, he said, view departure as the only rational move. But he emphasized that wanting to stay and being able to stay are not the same thing. “There is definitely a camp of folks who are gonna stick around through this,” he said. “But I think what’s important to talk about with those folks is that doesn’t mean that just because they want to, they’re going to get to.”
That is where, in his view, tax policy collides with a second major force: the rapid transformation of the tech industry by artificial intelligence. Ginsberg said AI is already changing software work at a pace most outsiders do not understand. “AI is real,” he said. “Inside of the software world, we have done this to ourselves.” He described today’s engineering environment as fundamentally different from even a few months ago. “What you do as a software developer today in any organization that’s building anything on the bleeding edge is wildly different than what you were doing even three months ago or six months ago,” he said. “And if you’re in my viewpoint, you know it’s never going back.”
That upheaval, he argued, is creating deep fear among exactly the kind of high-earning households lawmakers may assume are insulated from economic stress. “There is a lot of over a million dollar dual income east side households where these folks are working 24/7,” Ginsberg said. “They’re skipping play dates with kids. They are fricking afraid, man.” The reason, he said, is that companies are shifting spending away from people and toward AI infrastructure. “The dollars that they were getting are going to CapEx to invest in hardware, in GPUs, not for them,” he said.
As a result, many workers fear they may lose jobs they once thought were secure, without confidence that another opportunity will appear nearby. “These people existentially are afraid that the lives that they’ve created for themselves, they can’t even afford,” Ginsberg said, “much less afford with a 10% hit on top of it because they’re worried about getting fired tomorrow.” He added, “They’re also not sure where they get employed next. And it’s pretty clear that it’s not gonna be here.”
One of the most striking parts of the interview was Ginsberg’s observation that some Washington tech workers are not just moving to low-tax states like Texas or Florida. Some are heading back to California. In his view, they are making a hard calculation: if Washington is going to impose a heavier tax burden, they may as well position themselves in the center of the AI industry. “There’s not just people because of this who are leaving the Seattle area in Washington to Texas and to Florida,” he said. “They’re going back to California because they’re essentially saying, if you’re gonna tax the crap out of me, I might as well have better job security and be better positioned as AI kind of transforms my entire industry.”
That combination of tax pressure and AI disruption, he warned, is not fully understood by lawmakers. “These are two huge headwinds,” Ginsberg said. “And I will tell you, this one is one that our legislators are not aware of at all.” As those pressures intensify, he expects the consequences to become even more visible across the region, including in the housing market. Referring to listings in places like Kirkland and Bellevue, he suggested many households are already confronting the reality that they may have to leave Washington to rebuild financial stability.
Taken together, Ginsberg’s message was clear: Washington is not debating a distant possibility. It is confronting a present-tense erosion of the capital base, investor class, startup pipeline, and talent confidence that helped fuel the region’s growth for decades. In his telling, the real danger is not merely that more people might leave. It is that many already have—and that the wider economy is only beginning to catch up to that fact.