The Startup Funding War: Charlotte vs Research Triangle

Of all the facts I've reported in my column, here's one that I find most distressing: of the $459 million in venture capital investments made in North Carolina in 2008, only 10 percent landed in Charlotte and 90 percent of it flowed into Research Triangle.

I got this stat a couple months ago from the Ben Craig Center, a nonprofit advocate for entrepreneurs at UNC Charlotte. I have quoted the outfit's president Paul Wetenhall, saying that "Although Charlotte is a money center and has considerable entrepreneurial activity, its venture capital is almost nonexistent. There are many private equity firms investing in established businesses, but Charlotte does not have a single venture capital firm investing in seed, start-up, or early-stage ventures."

I was reminded of this recently when the president of a fast-growing high-tech startup expressed his frustration to me that various capital sources, from angel investors to venture capitalists to university grants and awards, tend to be biased towards companies located within Research Triangle. He said he's even been told by potential investors that they'd be more amenable to supporting his venture if he relocated out of Charlotte to the Triangle.

He says the political and business rivalry between the areas is just that pitched, and that startups pay a hefty price for that rivalry.

I'd like to hear from anyone who can support or refute that assertion. Is investment and seed capital really being steered away from Charlotte toward startups in Research Triangle, and if so, to what extent and how systematically? I'd love to better understand how 90% the $459 million in capital investments made in North Carolina in 2008 landed in Research Triangle, while only 10% here? I'd argue that one of Charlotte's short-term economic goals has to be closing that gap.