This region has plenty of wealthy individuals, but they don’t band together as venture investors. Why? We lack technology entrepreneurs and unique facilities for their companies, says John Rhodes, senior principal of national relocation consulting firm Moran, Stahl and Boyer.
“You can’t start a fire without some fuel,” he says.
Typically, venture capitalists follow a seed, such as a research university. “You can’t just wing that out of nothing. That’s what you have to do in
To attract venture capital, an area needs three key items, says Rich Swier, managing partner of Startup
First, local universities need to be delivering innovative science that can be commercialized. “That by itself delivers a lot of talent and a lot of research by the professors there. That research becomes the egg that becomes the company that draws venture capitalists,” he says.
We have universities, but not the formal programs for commercializing research, say Swier and Dan Miller, managing partner of Startup
Investors also seek a critical mass of technology companies, which would create spin-offs by employees—and founders—leaving and starting new companies.
“It’s essentially an ecosystem,” says Swier. “If you have 10, 20, 30 tech companies, that means you have a pool of people starting new things when they leave those companies. It draws new talent to the area, draws new ideas and ultimately that draws venture capitalists.”
There isn’t the volume of quality deals, says Miller, also managing partner of BizTank LLC. For its first $10 million fund, Startup
We also need a regional effort to recruit venture capitalists, but Swier says that requires funding. “It’s no different than recruiting a football team to come to your city,” he says. “You have to recruit and get them down here. Once they have a guy down here to look at deals, the end result will be one or two deals will get done.”
So far, locals who have money to invest focus on real estate, (mostly residential), says Kathy Baylis, president and CEO of the Economic Development Corporation of
“That’s a more tangible product. Your challenge is when you’ve got the entrepreneurial companies, and often their products are things many of us don’t understand,” she says. “They’re high growth, high risk, and you’re more likely to find groups willing to invest in them who have played in that area and have seen the returns.”
The best investment, thinks Swier, would be to organize universities, a technology base and mobilize someone to recruit venture capitalists.
The region has a good airport and telecommunications and a great beach, says