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Silicon Valley venture capitalist Victor Hwang looks at Buffalo and sees plenty of assets – such as universities, talented people and civic pride – necessary to build the type of “innovative economy” his home region is famous for.

“The only thing left is to unlock the relationships and the culture between everybody, so they can create great things together,” Hwang said Tuesday in an interview at the Bright Buffalo Niagara forum. The event at Statler City brought together entrepreneurs and investors who might become funding sources for their ventures.

Hwang is co-founder and managing director of T2Venture Capital and the primary author of “The Rainforest: The Secret to Building the Next Silicon Valley.” He had researched Buffalo’s history before coming to town and spent Monday and Tuesday meeting with forum participants.

So in Hwang’s view, what holds Buffalo back from capitalizing on its assets?

“I think what happened is, the history of Buffalo was based off of big projects, big silver bullet projects,” he said. “And those big projects ended up employing lots and lots of people,” such as the steel mills.

“The new economy requires people to come up with their own projects and start solving problems for themselves,” he said. “This is a different model. So the big barrier is a psychological one. It’s to say, what you did before isn’t where the game has shifted to. How do you create environments now that stimulate people to create new, innovative solutions together?”

Hwang was asked if the relatively small number of venture capital deals in Western New York was another barrier to that growth.

“Money is an easy culprit, and everyone likes to finger money as the problem,” he said. “But the truth is, there’s money everywhere. I mean, there’s so much money getting sunk into this community from the State of New York. There’s a lot of money locked away in people, in companies from the past. The question is, how do you organize that money, how do you form the money so that it’s useful, it’s productive?”

“And that’s different,” Hwang said. “Money is not the same as venture capital. And one of the big risks of Buffalo is to make that mistake, to think that money is the problem. Money is just a tool for solving problems.”

Hwang said it is up to individuals to be the driving force to build networks and foster innovative growth. “Government can nurture the environment and provide the resources to create the environment, but individuals have to be the activists that are out there building it.”

Jack McGowan, of Insyte Consulting, urged start-ups to explore a range of options to help themselves grow, instead of aiming solely for venture capital.

Start-ups attracting venture capital is “really the exception, not the norm,” he said. Venture capitalists typically invest in companies that are further along in their life cycle.

“If (venture capital) doesn’t work for you or isn’t a fit for you, it doesn’t mean you need to give up,” said McGowan, who also is director of the Western New York Venture Association and the Buffalo Angels.

Other funding options for start-ups include friends and family members, angel investors and government programs, he said. Some entrepreneurs find joint ventures are a better method for getting an idea off the ground, or use “bootstrapping” techniques, like getting credit from vendors.

“It’s a source of funding that really shouldn’t be overlooked,” he said, citing Dell and Bloomberg as two success stories built on bootstrapping.

As entrepreneurs seek funding, potential investors will want to know how much money the entrepreneur and his or her family members and friends have poured into a start-up, McGowan said. “You shouldn’t really expect (investors) to take on risks that you or people you care about aren’t willing to take on themselves. So it shows your commitment.”

email: mglynn@buffnews.com