Paul Graham, co-founder of the hugely successful startup accelerator Y Combinator, has a rule for entrepreneurs who hope to enter his program: They have to come to Silicon Valley.

Brad Feld, co-founder of a rival accelerator called TechStars, has a message for Graham: "I summarily reject his assertion, and the broader assertion by many VCs, that to create a relevant tech company, you have to be in the Bay Area."

Feld, who's now managing director of Boulder, Colo.-based venture capital firm Foundry Group, is one of the most influential tech investors outside of the valley. And though TechStars, which runs three-month programs in Boulder, Boston, Seattle and New York, has yet to boast a portfolio company like YC's Dropbox or Airbnb, both of which are estimated to be worth billions of dollars, he argues there are "significant companies being created in lots of different geographies."

To prove it, TechStars on Thursday brought a platoon of startups from its Seattle-based partnership with Microsoft to pitch potential investors on Menlo Park's Sand Hill Road. While that may sound a bit like bringing coals to Newcastle, investors in attendance pronounced themselves impressed.

"We're a global fund, so we believe great ideas can be found anywhere," said Nicolas El Baze, a venture capitalist with Partech International. The firm, which manages $850 million in assets, has offices in San Francisco and Paris.

El Baze cautioned that many startups ultimately find themselves forced to relocate to the valley as they grow and need access to the region's deep wells of investment capital and engineering talent. But he also credited Microsoft for having fostered "a good ecosystem" for entrepreneurs in the Seattle area, where the software giant is headquartered.

"All the collective energy and creativity there is phenomenal," he said.

Dan'l Lewin, Microsoft's top emissary to Silicon Valley, took the compliment in stride but said the company wants to push that phenomenon across the globe.

He said the company's BizSpark program, which gives participating startups free or discounted use of Microsoft software and servers, plus help with introductions and business planning, has partnered with tech incubators, universities and government agencies in more than 100 countries since its launch four years ago.

The collaboration with TechStars -- dubbed the Microsoft Accelerator for Azure -- is essentially BizSpark on steroids. Startups chosen for the program get shared office space in Seattle, development kits for Microsoft software and hardware and two years' worth of access to Windows Azure, the company's cloud computing platform. TechStars kicks in $20,000 per startup; access to a mentor network that includes the co-founders of Zillow and Maveron (Starbucks CEO Howard Schultz's venture firm); and, of course, the final exam known as demo day.

The 10 startups in the program went through their first investor pitch-a-thon two weeks ago in Seattle; Thursday's gathering took place in front of several dozen investors and assorted media at Sand Hill Road's Quadrus Conference Center.

The entrepreneurs, who tended to be a bit older and more professionally attired than the T-shirt-clad gaggles at Y Combinator's events, pitched smoothly and cooly for the most part. Their offerings ranged from Mobilligy, a mobile app that helps financially strapped consumers organize and pay their bills, to Keebitz, which lets Realtors, dentists and other professionals automatically reward customers who provide them with referrals.

Keebitz Chief Executive Anne-Aymone Ferreira, a startup veteran, drew a laugh when she handed one attendee a bottle of Veuve Clicquot Champagne and promised the same to anyone who referred a new customer to her company.

Keebitz also might best prove Feld's theorem that innovation knows no borders: Its founders hail from France, it was launched in Berlin and its users all are based in the United States -- for now, anyway.

"Entrepreneurship can drive local economies around the world," said Feld, whose recent book "Startup Communities" is a how-to manual for nurturing startup ecosystems anywhere.

Still, Dana Dyksterhuis, co-founder of a startup called Fanzo that gives sports fans a Klout-like ranking of their team loyalty, admitted to being a tad star-struck by the whole experience.

"It's mind-blowing," she said. "Here I am in Silicon Valley, pitching my company."

Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.

pitching lineup
Here are the nine startups that wooed prospective investors Thursday at the Windows Azure Accelerator Demo Day:
Appetas (Seattle) -- Helps restaurants market themselves online
BagsUp (Sydney, Australia) -- "Social discovery" for travel
Embarke (San Diego) -- Helps companies reach and retain users
Fanzo (Seattle) -- Gives sports fans a Klout-like ranking
Keebitz (Berlin) -- Automates referrals for Realtors and other high-volume businesses
Mobilligy (Bellevue, Wash.) -- Helps people manage and pay bills from their smartphones
Realty Mogul (Los Angeles) -- Crowdfunding for real estate
Socedo (Seattle) -- Helps salespeople scour the social Web for prospects
//staq (San Francisco) -- Helps developers monetize online and mobile games
Source: Microsoft