This star-studded panel (if you’re a geek) debated the merits of creating your startup in Austin, Silicon Valley, Shanghai, or any other city in the world. Conjunctured’s John Erik Metcalf moderated the panel, which featured (in the picture below), Robert Scoble, Mike Maples Sr., Kaiser Kuo, and Penelope Trunk.

Having a panel discussion at 10am on a Sunday might not be too difficult for some, but when there are tons of parties going on till late hours of the night (and you’re on California time), it can prove challenging. Especially for Robert Scoble. He lookedl like he had about 30 seconds to shower, and did so about 5 minutes before the panel. I had to feel bad for him as he got up from his chair half way through the discussion to grab another glass of water for some extra hydration. Robert is such a fan of the little guy with the big idea, that SXSW must be overload in terms of interesting discussion and fodder for his video blogging.

Mike Maples Sr. is a popular early stage investor on the Austin startup scene. He was formerly a senior executive at Microsoft, and is highly sought after for advice and mentorship. Kaiser is a writer, creative, and observer of the emerging tech scene in China. Penelope Trunk is an author from Madison, WI and writes the popular Brazen Careerist blog on the new workforce.

Panelists confirmed that when it comes to starting up a company and seeking funding, money is local. The financial system may be global, but early stage angel and venture moeny is highly local. Penelope said she’s been to the Silicon Valley trying to raise money, and being from Madison Wisconsin is a non-starter. In the end, she found backing from angel investors in Madison, although they are more difficult to find.

There was plenty of debate about Austin vs. Silicon Valley, but the reality is that the valley is simply a very large ecosystem of tech people. Everybody in the area works in some sort of technology field, and pays attention to technology. If you go to Armadillo Willies when it was on DeAnza Blvd, everybody in the place was talking about Apple technology. Any Starbucks or ToGo’s is filled with people discussing the latest innovations in Twitter and Facebook. The density of thought and discussion, as well as people with tech skills is high. The money follows the density of new ideas. If that’s what you need, then that’s where you should be.

Region is also important. If you have an energy technology startup, then you should be in Houston. For the next big B2C company requiring lots of venture capital, you should be in the valley. For enterprise software or gaming, Austin is a great place to be. There were no big revelations in this panel, but it’s fun to discuss and to hear the experiences of the incredible assembly of panelists.