A high-profile Californian venture capitalist is envious of Michigan.

Yes, you read that right.

Tom Baruch, founder of $1.2 billion San Franciso venture capital firm CMEA Capital, is fed up with California's lack of governmental support for innovative businesses -- and he believes Michigan's model is worthy of replicating.

“There's a lot going on in Michigan,” Baruch told former Ann Arbor Business Review editor Ron Leuty, now a reporter for the San Francisco Business Times. “Now I’m not that close to it, but you see it more in programs and policies. They’re protecting small businesses, providing tax breaks — lots of breaks — and they’re providing worker training incentives.”

Baruch adds: “California’s tough. In California, getting support from the state government is challenging. The funds are just not there.”

Is Michigan better at supporting businesses than California? Is California neglecting its entrepreneurial roots?

I'm not sure. Here's what I know: The comparison is outrageous.

The level of private investment regularly flowing into California startup companies precludes the need for Sacramento to throw taxpayer money at innovative industries.

Venture capital investors plunged nearly $8.9 billion into California companies in 2009, according to the National Venture Capital Association. Investors distributed $721 million in venture capital to startup companies throughout the entire Midwest in 2009.

So California is swimming in private capital, and Baruch wants the government to kick in more?

Michigan needs more. Michigan is hunting for more. The Michigan Economic Development Corp.'s Venture Michigan Fund and 21st Century Investment Fund collectively invested $205 million in private VC firms over the last several years. Meanwhile, the $150 million InvestMichigan! Growth Capital Fund is managing a small piece of the state's pension fund portfolio and investing in Michigan companies. Those efforts aim to jump-start funding for Michigan's entrepreneurial community.

Meanwhile, our private investors -- symbolized by Ann Arbor-based funds like Arboretum Ventures, RPM Ventures and the Renaissance Venture Capital Fund -- are actively seeking out Michigan investments.

The Renaissance Venture Capital Fund, led by Ann Arbor investor Chris Rizik, announced earlier this month that it had finished raising $50 million to distribute to other Michigan investors. And that funding came directly from major corporations.

"There's no government involvement in what we've done," Rizik told me earlier this month. "It's all private companies that have invested. Our goal in doing this was this has to be profitable for our investors to do this. This has to make sense."

It has to make sense. Government funding for an industry already awash in private funding? That doesn't add up.

California has capital and California has an entrepreneurial culture -- and an entrepreneurial culture is what we're trying to build in Michigan. The innovation culture in San Francisco, Silicon Valley, San Diego and elsewhere throughout California is the envy of the world.

Michigan's investors, startup companies and business executives -- they're aggressively trying to build what Ann Arbor SPARK CEO Michael Finney likes to call an "entrepreneurial ecosystem."

That makes sense.

That starts with leveraging the assets we already have, as in the University of Michigan, which is starting a business incubator at Ann Arbor's former Pfizer site to help house some of its own startup companies.

It starts with supporting U-M's student entrepreneurial movement, which is spawning innovative companies like Bebaroo.com, otherwise known as "Netflix for baby clothes."

It starts with finding partners for potentially revolutionary companies like Pittsfield Township-based Accio Energy, which is developing a wind energy device that generates electricity without moving parts.

It starts with initiatives like the TechBrewery, a business incubator that sprouted up in the Northern Brewery office building on Jones Drive and houses a number of innovative young companies and entrepreneurs.

"If we spent more time fostering the grassroots things that are already happening, we would see a lot more sustainable economic development," TechBrewery founder and Ann Arbor tech community organizer Dug Song told ConcentrateMedia.com this month. "We get into trouble when everything looks, smells and feels like a government program or school. You're not going to train a breed of entrepreneurs. I can't even say those words, it's so nonsensical to me. What you need to do is build a community that is trying, doing, and learning together. Find ways to make it easier for them to help each other.

Translation: the government can't revive an economy. Only we can revive our economy.

That's the real lesson for California.

Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.