Let’s face it, West Virginia needs to dramatically spark our level of entrepreneurship. It’s a pretty open secret that our dependence on both government and extractive industry over the decades has not exactly trained ourselves to think in innovative ways towards wealth creation.

Several organizations and volunteers have been working hard to change the awareness and skill side of that equation through contests and training efforts. The upcoming Entrepreneurship Week at the Capitol is an example, as is the great DreamQuest high school business plan contest and the college-focused business plan contest lead by WVU’s Entrepreneurship Center. The FastTrac series is another example for adults ready to dip their toe into the entrepreneurial waters. Great efforts all.

But what about funding? Vibrant entrepreneurial regions such as Austin, TX, Research Triangle Park, NC, Northern Virginia and, of course, Silicon Valley, have developed a community where idea generators meet with early stage and angel investors on a regular basis. There is constant rich interaction between these two crucial groups, with the net result being a multitude of new start-ups being created on a regular basis.

In West Virginia, many of the folks who have enough wealth to afford the risk of early stage investing are not as comfortable with this open, free flow of ideas. Many of them made their millions in the energy sector and prefer to keep their business dealings in markets they understand well. That is understandable. But at some point, in order for West Virginia to develop a fair share of more high-tech, high-growth industries such as Web 2.0 services and to commercialize the fruits of academic research, we need a group of investors who are willing to take more risks to connect with a growing pool of West Virginia-based entrepreneurs.

Is Kiva.org a model we could learn from? Kiva is the world’s first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world.They provide a forum for third world entrepreneurs to describe their desired use of funds (ie, their micro or startup business concept) and match them with social-minded investors who will lend small amounts to fund the project. 

From their web site: 

When you browse entrepreneurs’ profiles on the site, choose someone to lend to, and then make a loan, you are helping a real person make great strides towards economic independence and improve life for themselves, their family, and their community. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates and track repayments. Then, when you get your loan money back, you can relend to someone else in need.

OK, first we recognize that West Virginia, despite some rude jokes to the contrary, is not a third world country. But the idea of matching potential investors or personal lenders to micro-enterprises and business start-ups in West Virginia is a great concept. What if our version of this site connected well-to-do expatriates from West Virginia with entrepreneurs in their home state? 

We need to think out-of-the-box to address our early stage funding gap in West Virginia. We have investors here, but they tend to want to jump in during a later stage once a business has established itself. We are in great need of people who will invest in ideas that need to get to a sustainable stage. This requires more risk-tolerant investors who are more comfortable with emerging industries.