McCrory: Here are three things holding back NC startups

by Lauren Ohnesorge, Triangle Business Journal, March 20, 2014.

Entrepreneurs, Gov. Pat McCrory wants you to know you have a cheerleader in Raleigh.

McCrory, taking a break from his schedule on Thursday to chat all things entrepreneurship, tells me he’s waving the metaphorical pom-poms every chance he gets, touting North Carolina as an up-and-coming state for startups.

It’s a mission that packs a bigger punch following a recent trip to Silicon Valley, which gave the governor several talking points to add to his collection.

“I basically interviewed them and said what do we need to do different,” he says of conversations he had with venture capitalists about bringing their dollars to North Carolina.

He brought back three specific talking points - three things that “we need to do differently” if we want to attract the outside investment he says is critical to our entrepreneurial survival.

1. “Our tax code is not conducive to the first-round investors for venture capital, for high-risk, first-round investors,” he says. “If they make an investment, they often move (the startup) to a no-tax state, with the profits. That means we lose that money and we lose that sweat equity. We want that money to be reinvested in North Carolina."
2. “We’ve got to do a better job of marketing, not just our public universities in North Carolina ... But also our private universities, especially Duke, because Duke actually has a great reputation in places like California where there’s a lot of money,” he says. “We need to market Duke as much as we market our public universities. And I think we need to do more of a team effort in promoting our higher education in North Carolina and the entrepreneurship within that education.”
3. “We’ve got to convert more of our research grant money into commercialization and patents,” he says. “Our track record has fallen down in that area. ... We have got to incentivize the commercialization of those research grants. That’s where a lot of these businesses started up. Right out of Stanford, they converted research grants into commercialization of patents. ... My gosh, we have the universities to do that.”

A recently announced initiative at N.C. State University - a manufacturing innovation center that brought President Barack Obama to Raleigh in January - works perfectly with No. 3, he adds.

“That’s one of the reasons I supported (the manufacturing innovation center),” he says, telling me he’s in the process of crafting a budget and is planning to put between $5 million and $10 million toward that effort. “We’ve got to look for results. We can’t just do research and put a study up on a shelf. We’ve got to combine more of our science and engineering work.”

And that takes reaching across campuses. He points to UNC-Chapel Hill’s life sciences expertise and N.C. State’s engineering prowess.

“There’s got to be a team effort,” he says. “If we don’t get a better track record in that area, we’re not going to get the federal research grants we’ve gotten in the past.”

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