Brian Lash, a young Pittsburgh techpreneur, has an interesting POV on the unintended consequences of state-funded seed funds and incubators.

The most efficient way for a risk-averse investing public to perform due diligence on investing opportunities is to let others do it for them. No one's more willing to do that than the incubators who can finance it with other people's money (remember, they're state-funded). So it becomes a sort of right-of-passage for technology startups that they should pass through these incubators before they see an opportunity for venture capital, and more and more, for angel money. And you can't blame the investors... it's an economically-sound decision on their parts.

I went to college in Pittsburgh, looked at moving a company there, and think it has a lot of similarities to Providence. However, I think the interplay between our state-funded resources and our entrepreneurs works differently, and I said so here.

State seed funds and incubators adjust their form and shape to the vacuum that is unique to their locale. The number of existing tech angels, volume of startups, dominance of universities, proximity to major startup markets and the local cultural attitude to high-risk investment form the boundary conditions to which the state entity will (unconsciously) conform.

What are your thoughts on how funding, diligence, and gatekeeping works in RI for tech startups? What elements are we missing ? Who should be providing them ?