Is The Midwest the Next Silicon Valley?

Silicon Valley has long been the hotbed of start-ups and tech innovation. The Midwest, however, has lately been experiencing growth in this area. Enough to convince several Sequoia partners to launch a venture firm in Columbus, Ohio. In my opinion, the Midwest definitely has many untapped opportunities and it will continue to produce more. Will say, Columbus Ohio, become the next Silicon Valley? Probably not, but these guys definitely seem like they are on to something.

At a time when more than half of the country's venture capital--some $33 billion annually--is going to startups in California, two alums of Sequoia Capital, Silicon Valley's most successful VC firm, are making the mother of all contrarian bets: that West Coast money is getting dumb chasing the next Facebook and overlooking opportunities in the heartland. Investors think the two are onto something--in January Kvamme and Olsen's Ohio-based Drive Capital closed a $250 million fund, the second-largest inaugural fund anyone has raised anywhere in the country in the last year.

The math behind their thinking is straightforward. The Midwest makes up 19% of the country's GDP and comes up with 19% of its patents, yet the region draws only 5% of America's venture capital. That discrepancy suggests that midwestern entrepreneurs are starting fewer businesses not because they don't have good ideas but because they don't have access to the people who fund good ideas. "Ultimately, when we looked at the data, it was very, very compelling," Olsen says. "I think people will look back and say that was so obvious that the Midwest was about to emerge because the numbers had swung so far against it."

Thoughts? Is this a smart move? Will they find success?

Top Venture Capitalists Leave Silicon Valley, Bet Their Careers On Midwest