As the venture capital game gets bigger, the Midwest keeps missing out

Those working to accelerate economic growth in the Heartland must face some stark realities. The Great Lakes region continues to export wealth to coastal economies, even as investment leaders try to equalize growth between the coasts and the Heartland. The region sees only a tiny fraction of venture...

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Bibliographic Details
Published in:Policy File 2019
Main Author: Austin, John C
Format: Report
Language:English
Subjects:
Banking/Finance
Economic policy
The Brookings Institution
Online Access:Request full text
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Summary:Those working to accelerate economic growth in the Heartland must face some stark realities. The Great Lakes region continues to export wealth to coastal economies, even as investment leaders try to equalize growth between the coasts and the Heartland. The region sees only a tiny fraction of venture capital (VC) deals, despite producing one quarter to one third of the nation's research and development, new patents, and top talent. Great Lakes VC funds are currently seen as too small or too unknown for investors---at a time when VC is funding fewer firms with bigger exits. Given all of that, here's an approach policymakers and investors could try to stem the export of capital from the region: A regional venture capital fund-of-funds. A recent analysis sponsored by the Brookings Institution and the Chicago Council of Global Affairs, and conducted by a team of University of Michigan Executive MBA candidates, suggested such a remedy. A regional fund-of-funds would be a vehicle for in-region and out-of-region investors who put their dollars to work with investments in venture capital firms.