Venture Capital in Ohio
When it comes to venture capital, it is no secret that the east and west coast dominate the market.
But those places are incredibly expensive to live.
Businesses in the midwest simply do not reach the scale of those on the coasts, but great innovative businesses are being created all over.
A major problem in the financial industry is that students are leaving the state they are born in to find work with bigger funds. I think technology is going to slightly overturn this trend. The internet has given access to the world from anywhere on the globe. This means the same work can be done anywhere with an internet connection. The only difference is that connection might be slightly more expensive in Silicon Valley.
The most evident resource that Silicon Valley holds is the informed human capital. The people who understand the systems that control America’s largest businesses are condensed where the money can be found for funding.
I worked at Ikove Ventures for a year on Kinnear road. They are right across the street from Rev 1 Ventures. The crazy part about VC that I quickly realized is that most firms have a specific focus of the stage of business they work with. Ikove is a seed funding operation which meant we are funding ideas to turn them into profitable businesses.
I created social media accounts for each of the businesses that we funded and worked with the management teams to begin drafting an overall message and brand. We worked with businesses in spaces like biotech, agricultural tech & healthcare devices.
Despite not funding businesses at the scale of the east and west coast, the companies tended to have much more practicality. My experience working for a startup in San Mateo California was a completely different experience. In Ohio, the resources were spread incredibly thin, whereas in California new workers and ideas were in such great proximity. Space in California is more expensive, for good reason.
Because Ohio businesses are not required to pay employees the salaries they would in other places, more businesses are able to turn a profit. There is less deal flow in the midwest, but the deals have better margins.
I think a major shift that technology will allow is a slow change in this process. I noticed it even in the few years I have been involved in the space. Things are moving faster and there is more access to people who are not in your vacinity.
All of the people who provided value to the company I was working for in San Mateo can be reached through LinkedIn. This means that you can pay rent in the state of Montana but reach everyone that you would have otherwise talked to in California in New York. As the future of business tools progresses I imagine an in-person meeting with a hologram will not be incredibly difficult to orchestrate. This is why I think more people are investing in the Midwest than ever before. The same can be said for other places that are not thought of as a space for investing and startup capital.
Two investors from Sequoia Capital, a VC firm dominating the game capitalizing 20% of the NYSE, started Drive Capital in Columbus, Ohio. Given 1 in 4 engineering graduates are from the midwest, it might make sense to begin developing in areas outside of Silicon Valley and Silicon Alley.
People can be reached more easily than was once possible. I think technology will bridge the gap between old money and hustle allowing for people in every corner of the country to create valuable businesses. This is what is so exciting about the fourth industrial revolution to people who want to be involved in investing.
Ohio is not considered to be an influential player in the overall economy of the United States but it is becoming a growing power in the Midwest. As more technological advancements create opportunities for entrepreneurs, I think the places where people do work is going to diversify.