The headline of a recent post on Recode says it all: “A whopping 80% of all venture capital investment goes to just three states. That has to change.”
Those three states would be California, New York and Massachusetts.
The entirety of the Midwest — all 12 states of it — gets just 4% of U.S. venture capital.
As Rep. Tim Ryan (D-Ohio) and Rep. Ro. Khanna (D.-Calif.) wrote in the article:
“Our country faces an ever-growing number of challenges in the 21st century, but all too often our political dialogue can’t even begin to scratch the surface. While Washington remains mired in its usual partisan fights, entire communities across the country — especially in the Midwest — have been locked out of an economy that has moved away from the manufacturing base that helped build the strongest middle class the world has ever seen.
“Though it may not always feel like it, we have the perfect opportunity right now to help rebuild and rejuvenate struggling communities by connecting them with resources traditionally concentrated on the coasts — resources that can help retool their local economies and promote sustained growth and development.”
It’s a great idea, introducing big-name investors and political heavyweights to the middle of the country, exposing our entrepreneurs and our opportunities to those in a position to make a difference.
We all know that there is a cultural divide in this country — J.D. Vance wrote the bestselling book, Hillbilly Elegy, about it just two years ago. That is not news.
But the Midwest does need help. We do need capital to help startups and industries here grow. And, as venture capitalists, we need more lead investors as well. It’s time to throw open the doors to the region and welcome the rest of the world to what we have know about the Midwest for a long time: that there is opportunity here.
But it is different here than in the Bay Area. Those coming to town on bus tours or visiting to meet with entrepreneurs, even individual investors, should team up with the locals in order to make the biggest impact. We’ve been here for four years and know our way around the Midwest’s entrepreneurship neighborhood — give us a call.