The Next Silicon Valley Will Be in the US Heartland

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-blue kind of thing. While our efforts are political in terms of which economies we’re rescuing, and in working on government initiatives involving innovation, I’ve always tried to stay out of politics.

Your book touts immigration. In Silicon Valley an unbelievable percentage of founders were born outside the US. I’m not sure the same is true in the rising regions you’re promoting.

Those cities are more diverse than people think. Miami comes to mind, with a robust startup community where the majority of entrepreneurs are from other parts of the world. Atlanta, Baltimore, and Washington, DC, have a much higher percentage of black entrepreneurs than you’d see in Silicon Valley, because that reflects the diversity of those communities. I believe that if America loses its way and ceases to be the most innovative, entrepreneurial nation in the world, the most likely cause will be not having an immigration policy that is as welcoming to people as it has been for the past couple of centuries. We need to build bipartisan support for immigration reform.