A growing number of entrepreneurs are returning to their roots to build a business. That’s the latest insight according to a piece in Entrepreneur magazine.
While many people think they have to be surgically attached to the Silicon Valley or NYC in order to grow their startups, they’re missing out on an important reason why they don’t: Venture capitalist and angel funds, both from the coast and the heartland, have set their sights on Flyover Country.
Investment tactics have changed
Last year, VC investment rose in 33 states. Technology has curbed resistance that investors have had. Smart investors know that innovation is happening all over the country. Here are just two:
Revolution’s Rise of the Rest is a seed fund that is focused entirely on startups in smaller markets. The ROTR Seed Fund is backed by a group of iconic entrepreneurs, executives, and investors who “invest capital in the most promising seed state companies located outside of Silicon Valley, New York and Boston.”
Flyover Capital is a team of technology entrepreneurs whose purpose is to create the next generation of technology success stories in the Flyover region. The partners use their own operational experience to inform their investment approach and partnerships with portfolio companies and their founding teams.
Heartland Ventures is a group based in Indiana that connects high-growth startups with new customers in the Midwest. “We are a ‘values’ driven organization that sees the untapped potential the Midwestern region has to offer. Therefore, our process aims to deliver a significant boost to the economic development of the region,” its website says.
What’s in store?
Writing for Xconomy, David Brophy, director of the Office for the Study of Private Equity Finance and professor of finance at Michigan Ross, said:
“Over the next year, we’ll see investors and entrepreneurs from both coasts trying to come to the Midwest because the region offers a high quality of living and great schools at a lower cost than on the coasts. High-net-worth investors will see it’s now more economical to build entrepreneurial companies in the Midwest than on either the East or West Coast.”
You can also see how Flyover Country is making a commitment to innovation and startup development by the many community accelerator programs most cities have created. Also, investment and pitch competitions are all over the place in Flyover Country.
With any hangups about geography curbed by technology, and success stories aplenty, smart investors realize that innovation is not limited to the coasts.
Next week, we’ll discuss another misconception about building startups in Flyover Country: that networking is harder.