A revolution is happening in the heartland — are you paying attention?
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COMMENTARY | While venture capital has flowed freely in traditional tech hubs, there are plenty of founders elsewhere working on solving regional topics that could have a big impact.
While the East and West coasts are busy chasing the latest overhyped trends, the real economic game-changers are emerging where you might least expect it — right in the middle of the country — in America’s heartland.
For decades now, the world of venture capital has centered around places like Silicon Valley, New York, and, in more recent years, Austin, Texas. But venture capitalists’ geographic bias means they’re missing out. Increasingly, some of the most ingenious projects are emerging in places where it’s needed the most — in cities across the US where capital can be a bit more difficult to find.
The Middle America Gap
Despite producing over 35% of the nation’s GDP, the American Heartland receives only 10% of venture capital funding. Women in these rural areas receive even less: less than 1% of funding went to women-led startups in these areas.
These are damning statistics, but they represent something even more severe than just oversight; this lack of investment represents billions of dollars in lost opportunity, not only for VCs, but for the American economy at large. Hundreds of high-potential businesses are being ignored simply because they’re based outside of the reach of traditional tech hubs.
There are excuses that VCs will give as to why they’re not looking in these areas (proximity bias, lack of local infrastructure, talent retention concerns) but these are just that: excuses. And the cost of this laziness by investors is a loss of innovation, job creation and economic prosperity — prosperity that could reach even the most rural of America’s towns.
Here’s the truth: technology, talent, and game-changing ideas are thriving in small towns and mid-sized cities. They just need the capital to scale.
Investing Beyond the Beaten Path
Too often, rural entrepreneurs face an uphill battle in securing investment, slowing business growth, and reinforcing investor skepticism — a cycle that stifles development. Entrepreneurs in these “flyover” states don’t get their fair shake, and as a result, struggle to compete in the global marketplace.
But as someone who has seen the power of investment in less traditional places — in states like North Carolina, Georgia, Arkansas, Alabama and Oklahoma — I know the potential that’s out there.
Founders in these states aren’t leaching onto the same problems as founders in the coastal regions; you’re not going to find dozens of pitches of a new AI system in Alabama. Rather, these founders are working on more regional issues, giving them insight — and inroads — into addressing the untapped needs of millions of Americans.
The good news for investors is that the needs of rural Americans, if solved, would represent a major step forward in some of society’s biggest issues. Healthcare, clean energy, security: they’re all being addressed by rural founders, who are looking at the needs of their community and coming up with innovative — and money-making — solutions.
The needs in middle America look different than they do on the coast. In a banking hub like Durham, North Carolina, a company called LoanWell is working on revolutionizing how community lenders deploy capital through automated, customizable lending technology. In Fayetteville, Arkansas, they’re making readily-available farmland a hot new asset class.
These are groundbreaking innovations with the potential to impact every American, regardless of where they live, and they’re taking root in highly regional problems — ones that investors may not be able to see amidst the coastal fog.
An issue like rural health care access, for example, is something that even the best-intentioned Silicon Valley founder may never be able to fully figure out if they don’t have the on-the-ground experience that comes with living in a rural area.
Other industries, like renewable energy, are taking root in rural communities, which not only has the necessary land mass for wind and solar farming, but also are critical to creating buy-in; investing in rural-based, clean energy startups can accelerate the shift away from fossil fuels, and drive the innovation that lowers utility costs nationwide.
Founders in these areas are different from the parachuting-in entrepreneurs found on the coasts; they have hands-on experience with the problem, and they’re working directly with their customers to find solutions. They just need investment to help scale.
This isn’t just about revitalizing small towns. It’s about building a stronger, more resilient America.
Companies in these areas are working on solutions that can build stronger supply chains, bringing manufacturing and food production back home. They’re driving clean energy innovation, as well as tech-enabled agriculture to ensure that farming becomes more efficient, sustainable, and profitable.
Bet on the Heartland
Venture capitalists, individual investors, American consumers and policy leaders: the time to act is now.
The next wave of unicorns won’t just emerge from the Bay Area — they’re already being built in towns and cities across the US. These businesses drive innovation, create jobs, and ensure food security, energy independence, and economic stability. When rural America thrives, the country becomes stronger, more resilient, and better equipped to face future challenges.
Too many venture capitalists are selling America's heartland short. It is high time that together, we invest in opportunities beyond the well-worn paths. New norms are being created all around us, let’s create one of our own with our neighbors across the country. Let’s get capital flowing where it’s needed most.
The heartland is open for business. Are you in?
Gayle Jennings O’Byrne is the Founder & CEO of Wocstar Capital, a venture capital firm focused on investing in leading-edge technology and innovation.