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For innovators, investors make the state golden
October 13, 2011
   
   
California has fabulous weather, an educated workforce and a diverse, design-oriented population. It's the perfect marketplace for testing new products and technologies. And it happens to have another key ingredient: money.

For all the talk about how Texas and other states are luring away our jobs, this State of the State panel of innovators said California's advantages far outweigh the cost benefits that exist in other states, particularly for tech companies. California ranks first in venture capital investment nationally, and that's why the state is perceived as the capital of the start-up nation.

As an example, Henrik Fisker said when he started Fisker Automotive in 2007, he spent hours and hours explaining the idea of an electric vehicle with a range extender to European investors. He was typically met with: "We'll get back to you in six months." But in California, new ideas find fertile ground. "I walked into an office in Silicon Valley . . . and after three minutes, he says, 'I get it,' and I got $15 million. That would not happen anywhere else in the world."

The panelists did draw a distinction between Northern and Southern California, however, saying Southland investors tend to attach more strings and stipulations. "Southern California is only now starting to get it," said Scott Painter of TrueCar.

Of course, the state's great attributes don't mean it can rest on its laurels, they said. At some point, a high tax environment and a pricey cost of living could override the advantages, panelists warned. And the U.S. is increasingly seen as less welcoming than before. But for now, "there's just no other place you'd really want to start a company," said Dale Fox of Tribogenics.

So what did the panelists think would be the next game-changers to come out of California? Go to the end of the video (about 53:45) to hear their take.


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