The Next Silicon Valley Will Be in the US Heartland

2 days ago 20

The Rise of the Rest investments you extoll certainly benefited from that exuberance—and now may suffer.

Some Silicon Valley venture capitalists who were focused on rising cities might pull back. But most will realize it's crazy that 75 percent of venture capital has gone to just three states over the last decade. In the next phase, those Rise of the Rest cities have an advantage because startups there tend to be more capital-efficient. They've had to be, because they can't assume they can always raise more capital.

Speaking of capital, you’ve raised two funds to invest in Rise of the Rest companies. What was the return on that first $150 million?

We haven’t announced it. We said when we raised that fund we would generate top-tier returns. We had a pretty remarkable group of individual investors—Jeff Bezos, Howard Schultz, Ray Dalio, Henry Kravis …

Are they calling you to say how happy they are?

They've been pleasantly surprised that we're doing as well as most of them expected, if not better.

So you are indeed saying you’re getting “top-tier” returns from these regional investments?

Top-tier.

The guy you picked to run that fund was J. D. Vance. But your book doesn’t have a single mention of him. Have you broken with Vance since he went MAGA?

He was with us for about a year, but then he moved to Ohio. I haven’t talked to him since he announced he's running for office, and I haven't supported that campaign. I'm surprised by some of the things he's said.

You hired him in part because of his vibe of bringing the country together. But he seems to have used that to promote himself before adopting a totally different, divisive approach. Do you feel snookered?

That word seems a little strong. Most of our conversations were about the fund and the companies we were backing. Occasionally we would talk about politics, and the things he talked about seem inconsistent with what he's saying now. In terms of what we asked him to do, he was helpful. These bus tours we did weren’t a red-versus-blu...

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