Paul Graham is right about governments being poor at funding innovation growth. In his How American are Startups? speech, a candid analysis of how to create an innovation center like Silicon Valley, Paul damns government’s abilities to fund companies.
Government is not a good replacement for rich people / angel investors as they’re slow, invest inappropriately and don’t have the contacts or experience to support the right activity
I have never seen a Government backed program funding growth well. Myself and my partners spent two years in a institionally funded technology park that remained resolutely empty of companies during the 2000 boom. My company, which was funded through private and public equity investors, was the only company to contribute to the staff count in the park for almost two years.
I think VCs, business angels and self interested investors have no equal when creating long term regional growth.
[Paul’s speech is transcribed by Suw Charman and Tom Coates.]