Cisco CEO, John Chambers, recently alerted a lot of attention when he stated that he has $46 billion to invest and he’s favouring the European startup industry. Using this money to acquire US based companies and recruits is longer of interest to him based on a US tax law that he’s been trying to influence. The law states that any money invested overseas will be taxed over 35% when it’s brought back into the US – quite a ludicrous amount and something that falls greatly in favour of European startups.
In his words: “I have $ 46 billion and I’m very bullish on European startups.”
The timing of this news couldn’t be better as he’s currently in Barcelona for the World Mobile Congress. Don’t all run at once!
His Standpoint
John Chambers has stopped shopping for US acquisitions and has already bought two companies this year, both of which have been located overseas from his US base. As Cisco has been seen as a company responsible for many acquisitions, it comes as a blow to the US, but Cisco are not the only influential company operating in this way. In total, US companies hoard about $1.7 trillion in offshore businesses.
Could this be your opportunity to shine in front of a potential large scale investor? If things don’t change in the US, it could open up a whole new world of opportunity for startups in Barcelona and other areas of Europe.
He also had this to say: “Tax policy will determine where our growth and head count will be. I’m a very loyal American citizen and company, but in terms of future growth, unless tax policy changes, you will see that occur outside the US… wherever we acquire is where our head count growth is going to be. If the majority of our money remains outside the US, and this depends on tax policies, that’s where you’ll see us acquire going forward.”
Definitely a development to keep tabs on.
Image courtesy of: http://www.businessinsider.com