By all measures, the RTP area of North Carolina should be growing startups and growing massively large companies with the best of them.

UNC, Duke, NC State + dozens of smaller colleges/universities within a one hour drive provide a very well educated work force.

An existing network of colleges exist within a several hour drive (Wake Forest, etc.)

The financial center (hopefully things will return to at least "functioning") of Charlotte is a day trip in a car.
Washington D.C., Atlanta and New York are airplane day trips and Boston, Chicago and Miami are overnight trips away. Attracting constant attention from traditional VC funds is not a problem.

There is a strong base of both Tech and Life Sciences companies in RTP. This base can provide everything from internal skunk works within these companies to employees leaving to create startups.

The weather ain't all that bad - for the East Coast.

So - what is the real problem - it isn't money.

The problem can be found in passivity, complacency and parochialism.

I was once told (by a Silicon Valley born and bred person), "everyone has their prejudices - but these folks (around RTP) actually let that get in the way of making money." The Silicon Valley is not filled with folks singing "Kumbaya" - but it is filled with folks who are more than willing to put aside whatever personal feelings they may have if there is a buck to be made.

One of the most prominent venture capitalists in the RTP region once said (in private) that all the "entrepreneurs" around here are hoping that one day they can afford a nice beach house on the Coast, instead of . . . . being entrepreneurs.

Nope - RTP is an example - it isn't only about the money.

It's really about the people.

BUT - money for seed/startup development is essential.

Funding startups shouldn't come from the government - it should come from a For Profit Seed/Startup fund that works with, supports and Compensates the Seed Infrastructure (incubators, tech transfers, economic development agencies). The Seed Infrastructure should not concentrate on being landlords, academicians or civil servants. The Seed Infrastructure should concentrate on sourcing, screening and providing post Seed investment oversight for companies that will ultimately be worthy of traditional Series A investments.

And remember, this Seed Infrastructure is, for the most part,already funded by local/state governments, academia and corporate sponsorships.

The idea of simply throwing money into a broken system won't work. The idea of expecting the traditional VC stage of the Risk Investing industry to innovate or nurture is fallacious. Regardless of what Alan Patricof said in his NYTimes article - VCs don't nurture. VCs provide growth capital for those Seed/Startup enterprises which have reached a level of traction and validation.

Thomas Friedman was even more delusional with his idea of giving 20 VC firms $1 billion each to generate innovation. All you are going to get by giving VCs $20 billion is somewhere between $2-$2.5 billion in management fees for the VC firms.

I do not know how you can generate an "entrepreneur" mentality in a short time - after all, even the success of Noyce and Friends took a while to take hold after they left Fairchild to start Intel.

But, I do know the way to start - please read (and feel free to comment) - http://www.slideshare.net/ElliottDahan/start-fund-feb2009

Elliott Dahan
The Growth Group
elliott(a)thegrowthgroup.com