I just read a CNBC article a few days ago about the 12 cities in the United States where you can live like a fat cat on a $60,000 salary. They include; Houston, Buffalo, Louisville, Kansas City, Birmingham, Cincinnati, St. Louis, Indianapolis, Cleveland, Pittsburgh, Memphis and Detroit. One may ask, who cares? I don’t ask the question in a perfunctory way, I mean it literally: “who cares?” The answer is start-ups! At least they should.
If we go back 25 years, startups flocked to Silicon Valley because that is where they would find resources. They would bootstrap and pray for a miracle. Miracles happened for some, but not for the majority. The challenges of managing their burn rate in a region with escalating high costs needed to be balanced with access to funding and good quality staff – a balancing act that was then, and still is, not easy to achieve by most. The great thing about Silicon Valley, and the reason it will always be Silicon Valley, is that there is a plethora of outstanding institutions and college graduates wanting to stick around after graduation. The successes have led to reinvestments in new deals and those new deals have been able to beget new investments. In fact, my estimate is that in the 25-year history (that I am benchmarking), there are at least 3 generations of reinvestments: In other words, exits that led to new investments, that led to other new investments, etc.
So what is changing? The Midwest is changing. Rapidly. First of all, excellent universities across the Midwest are rapidly setting up sophisticated entrepreneur centers and incubators. Some have even reached significant levels of success, like the Purdue Foundry. Cities are mobilizing. Look at 1871 in Chicago. Look at Cintrifuse in Cincinnati. Traditional investors are warming up to the start-up community. Slowly. But it is happening. Equally important, investors from the coasts are moving to the Midwest for a better quality of life, and are bringing with them their investment expertise in start-ups and their liquidity. My guestimate – and I apologize in advance for the highly unscientific treatise – is that the Midwest is a third of the way into the Silicon Valley reinvestment cycle. This is good news for start-ups. Money is being reinvested now from the first cycle of successes in the Midwest and we have a way to go.
It can no longer be said that a start-up cannot flourish in Louisville, or St. Louis, or Columbus, or Madison, because of a lack of good talent. God knows, these cities all have excellent universities. And now, like in Austin, TX, a lot of the graduates from these places are choosing to stay in their college towns after graduation.
The exciting news for Keiretsu Forum Midwest is that 7 of the cities cited in the CNBC article are here in the Midwest. The quality of life is second to none. The cost of living is unbeatable. The funding is here. The talent is readily available. And the cities are noticing the connection between the entrepreneurial community and economic development. The smarter cities are even paving the way to regional economic activity through smart policies and investments. Keiretsu Forum Midwest is, by its very nature, a regional facilitator. We are the glue between the entrepreneur community and the investors across the Midwest. We love to support our entrepreneurs. We love collaboration. We love to pay it forward.
For more information, write to: email@example.com