A recent tour of Silicon Valley venture capitalists through the Midwest has sparked a huge wave of opinion and speculation about their interest in the region’s startup scene.
After chronicling the trip, New York Times columnist Kevin Roose wrote a hotly debated column titled “Silicon Valley is Over, Says Silicon Valley.” In the piece, Roose details a three-day bus trip through the Rust Belt taken by venture capitalists in which he portrays them as becoming overwhelmingly charmed by the Midwest lifestyle.
In a follow-up article, he admitted that although techies are a long ways away from moving from San Francisco to Detroit themselves, they are showing signs of investing more in Midwest startups and encouraging the employees below them to relocate to the region.
Ohio Congressman Tim Ryan organized the trip along with fellow Democratic representatives so that investors from America’s tech capital could meet business owners and employees from America’s heartland.
Mark Kvamme, the co-founder of Drive Capital, one of the region’s largest and most successful startups, told Quartz that, even though Silicon Valley has been reluctant to invest heavily into the Midwest to date, the pattern is beginning to change.
“Last year we’ve seen more Silicon Valley visits than in the last four years,” Kvamme is quoted as saying. “What’s going to happen is the same thing that happened in New York.”
As Quartz noted, however, Silicon Valley investors have participated in a measly 10 percent of venture deals in the region since 2012.
The obvious advantage that the Midwest does have over the Bay Area going forward is housing costs, which are getting too absurd out west even for the employees at leading Silicon Valley tech companies. This could lead to a steady trickle of human capital into places like Columbus and Chicago over the next few years.