This story is part of our May 2026 issue. To read the print version, click here.

Like many other Capital Region residents, Kevin Wolf went to UC Davis and “never left.” Since graduating with honors from the University of California’s second-largest campus by enrollment in 1980, he has spent decades in the Capital Region, founded sustainable energy company Wind Harvest and, perhaps most importantly, remained an active member of the community.

“A lot of us want to stay,” he says, “because it is a great place to live and grow families.”

Wolf founded Wind Harvest in 2005 and has grown the company with community support in the form of several rounds of crowdfunded investment. The company sells a vertical axis wind turbine that can be positioned beneath traditional large turbines to increase the amount of energy generated from the same surface area and create synergies that will also increase the efficiency of the larger turbines.

His path to growth, he says, is in part thanks to state institutions that are based in California’s capital city as well as supportive local government and utilities. He is part of a growing group of CEOs, founders and investors who are choosing the Capital Region over Silicon Valley as a place to launch their businesses and careers, especially in fields such as clean energy and agricultural technology. We spoke to a few to understand why.

Capital perks

Living near the state legislature gives unique benefits, Wolf says. “Perhaps you find out the parent of the kid that goes to school with your kid now is on the California Energy Commission. … You have those kinds of connections that come from living near the power players of the state. Even if they don’t affect what you do, you certainly have access to information and advice because you come to be friends with them.” The concentration of expertise from lobbying and consulting firms based in the capital city also means startups will often have a rich pool of potential employees to choose from.

SMUD has also been a huge boost to sustainable energy businesses in the region, Wolf says. The community-owned utility closed the Rancho Seco Nuclear Power Station in the 1980s following a vote by ratepayers and now generates a large amount of its power from hydroelectric, solar and wind. SMUD’s willingness to support sustainable energy and infrastructure is something that several CEOs in the region have highlighted as an important part of the choice to start their businesses in the region and their decision to remain here as their business grows.

Related: The Future Of Electric Vehicles Is Taking Shape in Sacramento

“You don’t get many utilities like SMUD,” Wolf says. “They are a huge plus for the region. … They are the leaders on everything renewable, and they made a hugely successful movement away from nuclear and into renewables.” SMUD’s use of renewables also means that, at a basic level, most residents of the region have an understanding of the viability of renewable power, Wolf adds.

Rick Spencer, managing partner at venture capital firm Growth Factory, agrees. He says SMUD makes “a great partner, because they’re big enough to have an impact on a startup, but they’re small enough to navigate.”

SMUD is not the only pillar of the Capital Region clean tech community. In 2005, the same year that Wolf founded Wind Harvest, Gary Simon founded California Clean Start to give support and resources to clean technology entrepreneurs. California Clean Start has helped build an investment environment where people understand that growth for clean tech companies can be less spectacular than the ultra-high profit, fast growth firms that Bay Area investors tend to look for, but that it is still reliable and offers a net social benefit.

“We pitched at half a dozen events,” Wolf says, adding that it would have been near impossible for his small startup to get in front of so many experts and investors without the infrastructure that Clean Start provides.

Samsung has established a small but growing facility in Folsom; Hynix, a South Korean firm, invested $9 billion in solid state memory development firm Solidigm, based in Rancho Cordova; and Bosch has established a semiconductor facility in Roseville. With tariffs on Chinese goods remaining a constant source of uncertainty, the Capital Region is becoming a more attractive site for well-paid manufacturing jobs for the tech industry.

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Nonetheless, growth in the clean sector can also be challenging because of the large amount of regulatory and testing hurdles that a startup must overcome before it can begin selling products. Startups “struggle to get capital to get through the last steps of the commercialization process,” Wolf says.

“You are dealing with an industrial-scale technology in which you have to go through third party certification. You have to make two full-scale prototypes and eventually have enough of them in the ground long enough for a bank to lend using those turbines as collateral for the note,” he says. This has traditionally made Venture Capital firms unwilling to invest, Wolf says.

A growing investment network

Ali Mackani, a general partner at Growth Factory Ventures who has founded seven startups, says that capital was not always easy to come by in Sacramento. “Early on,” he says, referring to his days as an entrepreneur in the first decade of this century, “I never saw Sacramento as a place where I could actually do a startup. … I never was successful in raising capital in Sacramento.”

Mackani, and others, went to the Bay Area to seek investment and found that “it was like night and day” compared to the Capital Region. Today, in part thanks to Mackani and his partners at Growth Factory, that is not the case. Capital is available to take firms to a stage where they can grow large and successful enough to attract investment from outside the region.

“Can we use more capital here? Of course! And that’s our job, right?” he says. Right now, though, he says Sacramento startups have everything available in the region to get them to series A, or their first round of significant venture capital funding.

Mackani says that even though investors in Sacramento are more numerous than they once were, there is a different focus among local investors. “In the Bay Area, they build for quick exits,” he says. Sacramento founders and investors tend to have more “longevity” in their build and their strategies often focus on growth not just for their company, but for the community as a whole.

In Silicon Valley, “You’re trying to change the world, right? So the Bay Area will jump in and really get behind this, and they’ll give you money just to see if something will happen,” Mackani  says. “I think in Sacramento, when you’re genuinely trying to do something, there is a group of people in this city that passionately care about uplifting the community.” Capital Region founders and investors are “good people with good hearts,” he adds, and tend to want to stay in the region they’re investing in.

Related: Scaling a Company Starts With Letting Go: Four CEOs explain why delegation, discipline and the right hires make or break the next stage of growth

Meanwhile, “There’s a ton of transplants that come into the Bay Area to build, which is great. That’s what makes that community so vibrant,” Mackani says. But Sacramento often “changes the mindset” of people who experience it for the first time. “I see them wanting to do more and wanting to stay.”

‘Triple bottom line’

When Wolf began pitching investors in the Bay Area, “I was in there explaining we could get a 30 percent margin and they just dismissed me, saying, ‘If you can’t get 50 percent, we aren’t interested,” he says, adding that the industry average for clean energy tech is 20 percent. “At least in Sacramento people would say, ‘Let me understand this a little bit more.’” He feels that his business owes a lot to “a less arrogant and more inquisitive or open place like Sacramento.”

Wolf adds that community support is especially important. “What you want to have as a startup is patient investors, not those who want their money back,” he says. Through crowdfunding, “We have got 3,000 people who would never get a chance to invest in a technology like ours.”

“I can’t tell you how many people we meet, and we share some of the portfolio companies, and they’re like, ‘I had no idea these types of companies were being built here in Sacramento.’”

— Rick Spencer, managing partner, Growth Factory

Mackani and Spencer of Growth Factory both believe that the region has potential for much more growth. The issue is not that there are too few people in Sacramento who are able to invest, but that those people don’t see the Capital Region as a place where their investments can grow.

“I can’t tell you how many people we meet, and we share some of the portfolio companies, and they’re like, ‘I had no idea these types of companies were being built here in Sacramento,’” Spencer says.

The way he explains the value of investing in startups to local investors is with the concept of a “triple bottom line.” This means growth not only in the financial value of the investment, but also growth in the community and growth in the human capital in the region. Research published by the US Census Bureau shows that a startup job creates more jobs than a job at an older company.

Not only do startups increase human capital in the region, but Wolf believes the less frantically growth-focused business mindset and livable communities of the region also help retain that talent. “We have a big pool of talented people,” he says, “because they want to live here.”

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