Yesterday I dropped in on the really (really, really) smart guys at Integrum during their weekly event ‘Hacker Night’.  Brian Shaler had invited me and he introduced me to Derek Neighbors, the ‘Pragmatic Idealist’ (title on his biz card) who might be the guy you’d identify as attempting to ride herd on this crowd, that is between sessions of World of Warcraft and visits from people who want to know more about what they’re doing.

In the midst of a darkened room, thumping music, video games projected on a wall 6′ wide and clicking keys from programmers collaborating on quick idea projects. we sat and chatted about what he and Jade Meskill are doing and the philosophy behind the project.

Darek and Jade are looking for the guy sitting at a desk today, with a great idea and they just need a bit of help to get going.  Perhaps just a few months of expenses or so – I’d call it micro-fundinEditg almost.  Neat idea.

What I learned also is that  we share a common perspective on the entrepreneurial community here in the State; that it is, at best, a dysfunctional environment that drives the best and brightest in the state to Silicon Valley and the bay area for development and funding.  We also agreed that we, as a community, have to find a way to stop the exodus.

Incubators are not the only way, to be sure, but they can be a resource for early stage companies as they tryout their ideas and test their assumptions about the market.  They have made a difference in other states and I think we could handle a few more here in Arizona.

Keep in mind that Arizona is a state that has the 6th largest city in the country, and has three of the top 100 business schools in the world.

If we count Integrum as a proper entrepreneurial incubator, which I am not sure Derek does, it brings to my attention that the state harbors only eight (8) entrepreneurial incubators; California came up with 22 incubator locations in about two seconds in a Google search, all listed at  Gaebler Ventures.

I did not try to include bio-tech in my count, I not too involved with any of them and they functions in an different realm than I do.

The Arizona list includes the various university-based efforts with two at ASU (SkySong & the WP Carey Spirit of Enterprise Center), Two at UofA (Arizona Center of Innovation & Eller College of Management at UofA) ,  and Two at NAU (Northern Arizona Center for Emerging Technologies & W. A. Franke College of Business at NAU).

Now we can add to that list private efforts, such as the newly opened ClubE Factory, and then Integrum rounds out the list at eight.  Please share any others you know of and we’ll extend our resource list.

So what are we missing here in Arizona?  Why is it that our best and brightest are leaving in droves and why cannot we sustain a more effective entrepreneurial economy?  I am not sure I have the answer yet.

If it is funding, it may be that this real estate bust may be one of the best things to happen to the local effort to source local capital for local businesses.   The allure of steady returns on land has diminished and now investors are looking elsewhere.   I remember hearing that the Arizona Angels have more investments in the last year or so than the prior 10 years.

If it is government support, I think they are listening.  I applaud the State in their efforts; the Arizona Angel Investor Tax Credit Program, administered by the Department of Commerce is a gleaming beacon of hope in this area.  The program was lobbied for by the Arizona Tech Council and enacted back in 2006.  It supports the growth of the Arizona entrepreneur by providing a 30% tax credit to the investor for any qualifying investment in an Arizona start-up.

With this great incentive program available, you have to wonder what’s up and why do investors / start-ups not use it?  Are Arizona investors making so much they can’t use the extra 30%?

I counted the list today and there are 40 companies have been certified by the program.  I just did the work to get Silent Dispatch, Inc. on the list and the process is not hard, or tedious or demanding.

Is it a reflection of the mentality / reality that you have to go to San Francisco or NYC for funding a tech startup?  I have a friend who counsels trains entrepreneurs here in Arizona and if / when they need funding, they are bundled up and introduced to Sandhill Road VC’s.  They simply do not believe that there is a viable funding option here in Arizona

So how do I see the entrepreneurial culture in Arizona?  Difficult but better than is was and still improving.