No funding? Brain drain? These experts debunk myths about the Arizona tech scene

By Hayley Ringle  Phoenix Business Journal  Feb 3, 2016, 1:29pm MST

We’ve all heard the myths about the Arizona technology and startup scene.

Arizona has no available capital. Startups and college graduates want to immediately move to Silicon Valley, New York City or Austin as soon as they can.

Jim Goulka, managing director of Arizona Tech Investors, has heard them all.

“This is mythology that’s built up in our community over time that we hear over and over and over again,” Goulka said.

He brought up the topic at the Phoenix Business Journal’s Jan. 25 technology roundtable with local CEOs and top executives at ASU SkySong in Scottsdale. Look for a story this Friday in our weekly edition on all the topics discussed at the roundtable.

Goulka has posed the question several times to people who say this to give him the names of all the companies that have left Arizona in the last five years. He knows of only two software companies, and one told them right away they were planning to move to Silicon Valley before they asked for money.

Scottsdale recently was named as one of the best cities to launch a startup, outside of Silicon Valley and New York, by DataFox, a San Francisco-based deal-sourcing and research platform.

Also, angel investment group Desert Angels was ranked last April as the third most active angel group in the nation after investing more than $6.8 million in 32 companies in 2014, according to the Halo Report.

AZ Tech Investors have invested $12.5 million since its inception in 2007. Last year, their members invested $2.2 million in 13 Arizona-based companies.

The other often-heard myth about the Arizona tech scene is that all the state’s university graduates flee the state soon after graduation.

Turns out, that’s not true, either.

The Arizona Technology Council, with the help of ASU, conducted a study several years ago on Arizona’s technology workforce. Part of the study looked back 10 years at the three state university alumni databases.

The research showed that 72 percent of all ASU grads in any degree, including in STEM fields, from 2000 to 2010 were still in Arizona.

That number was a little less, 66 percent, for the University of Arizona, and Northern University Arizona was 64 percent, for those who received a science or engineering degree and remained in the state, said Steve Zylstra, the Tech Council’s president and CEO.

“Those are astonishingly high numbers,” Zylstra said. “We don’t really have the brain drain that people think we have. That’s not to say people don’t leave. A lot of us graduate from college and we want to explore the world. That’s going to happen naturally. It’s not because there’s anything particularly wrong with Arizona, although they may be looking for a different kind of lifestyle change. For the most part we’re pretty good at keeping our talent here in Arizona.”

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