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Peter Thiel is one of the savviest investors of our time. His $2.5 billion net worth is proof of that.

So when Thiel says the next big innovations will be born in the American Midwest, it’s probably a safe bet that he’s onto something — especially since he is planning to put his money where his mouth is.

Bloomberg recently ran a piece about Thiel that read, in part:

[Thiel] joins a growing group of venture investors searching the country’s heartland for startups to bankroll and says the next innovations will likely come from less insular, less expensive areas. Despite a steady decline in recent years, Northern California and New York startups still attracted more than half the $70 billion total venture capitalists invested in the U.S., according to the 2017 MoneyTree report.

Along with geography, sector is important, Thiel said. Artificial intelligence companies don’t appeal to him, but “charismatic” technologies do like Bitcoin, biotech and anything his longtime friend and fellow PayPal co-founder Elon Musk develops.

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So why exactly is Thiel homing in on the Midwest as the new epicenter for his VC funding?

It’s simple: Because costs are low and innovation is high.

Some estimates suggest that a Chicago startup could have a 50% lower burn rate compared to a Silicon Valley company of a comparable size. Lower costs mean a quicker turnaround on profitability — which means a lower chance of failure and a higher chance of return on investment.

Nashville, for instance, is drawing a lot of attention for its strengths in healthcare IT. Several reports have shown an increase in VC funding there for health IT, reaching $62.5 million in 2014.

As of 2015, Chicago, which got put on the tech startup map thanks to companies like Groupon and GrubHub, was the 5th largest and the 11th fastest-growing tech market in the United States, according to a report by investment firm CBRE. The city also boasts the country’s third largest growth rate in tech jobs, beating out Silicon Valley.

And these cities are hardly islands of innovation. In a list of the 14 best startup cities in the country, St. Louis is #1, followed by Des Moines, Cleveland, Urbana, Illinois; and Detroit.

Obviously, when it comes to investing in the Midwest, Thiel knows what he’s talking about.

We couldn’t agree more. That’s why our team has been doing early-stage investing in the Midwest for over two decades. In the last three years, we’ve evaluated over 4,000 Midwest companies and invested in 34.

And we’re not alone in our belief in the Midwest startup culture. We’ve also co-invested with 80 venture firms and strategic investors.

So, to all those looking to come to the Midwest to invest — from Peter Thiel, to his Founders Fund, to the Rise of the Rest and more — reach out. Give us a call. Find out more about how iSelect is investing in the future of the U.S. and what you can do to help.