Viewing blog posts written by Gino DiCaro

8 reasons to leverage California's venture capital with a competitive environment

Posted by Gino DiCaro, VP, Communications on July 22, 2010

California receives a majority of U.S. venture capital (VC).  Always has, hopefully always will.  Our state produces brilliant creative minds and ideas because of its University power and its sheer size of 35 million people.  This unique outcome alone does not however equate, by default, to the meaningful job growth necessary for our many workers whom are unemployed and under-employed (a term becoming all too common for the folks forced to take any job they can find).

We must leverage our built-in VC advantage to ensure that emerging green and other products are actually produced here.  California's wealth will be multiplied once VC cash gets beyond the investment board room offices and into the bank accounts of our very own hard working, middle class families.

Recently the LA Times wrote a piece about VC growth in California and the notion that it does, and will, open the floodgates to new green jobs.  Often the state's VC numbers are used to support bold California-only mandates and policies, without regard for the state's competitive disadvantage.   Now the impressive amount of VC investment is being used to justify opposition to Proposition 23 -- the ballot initiative to suspend AB 32 until our economy is in better shape and unemployment numbers are reduced.

I offer eight recent independent examples and statistics that refute the notion that VC and seminal green projects automatically produce the type of job growth this state needs for its economic recovery.

  1. Silicon Valley-based Solexant solar systems raised $41.5 million in VC but uses a $25 million loan and Oregon tax credits to build 200-employee manufacturing facility in Oregon.  Daily Finance article
  2. California-based Fisker automotive purchases manufacturing facility in Delaware to produce it's $90k and $40k plug-in hybrids. (Why didn't these guys get the same deal Tesla got?) Wired article
  3. Orange County-based Amonix has big list of VC investors but purchases 214,000 square foot facility in Nevada for 300 workers to manufacture its solar power systems.  Las Vegas Review-Journal article
  4. Oceanside-based biotech firm International Stem Cell Corp. using VC in India to site facilities over there. SD Business Journal article
  5. Richmond-based Vetrazzo recycled glass countertop manufacturer receives $2 million in VC, but only if they move production where they can compete. SF Business Times article
  6. California movie mogul Kevin Costner has spent the past 15 years developing an oil-cleaning centrifuge machine.  It's being made in Carson City, Nevada. article
  7. California's overall portion of U.S. new and expanded manufacturing facilities was 1.3% over last five years, while close to half of the country's venture capital continues to funnel to the state.  chart
  8. Lastly, a reminder of some other companies that went with more competitive manufacturing locations that were mentioned in our "Why not California" series.

VC might have translated into regional job growth in times long past, but now the world is too mobile, too competitive, too global.  California must find a way to compete so we can leverage our VC dollars, creative minds and ideas into broad wealth for all working families.

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