The Rise of the Rest investments you glorify have certainly benefited from that exuberance — and may now suffer.
Some Silicon Valley venture capitalists focusing on emerging cities would back out. But most will realize that it’s crazy that 75 percent of venture capital has gone to just three states in the last ten years. In the next phase, those Rise of the Rest cities will have an advantage because startups there tend to be more capital efficient. They had to, because they cannot assume that they can always attract more capital.
Speaking of capital, you raised two funds to invest in Rise of the Rest companies. What was the return on that first $150 million?
We didn’t announce it. We said we would generate top returns when we raised that fund. We had a pretty remarkable group of individual investors – Jeff Bezos, Howard Schultz, Ray Dalio, Henry Kravis…
Do they call you to say how happy they are?
They were pleasantly surprised that we are doing as well as most of them expected, if not better.
So you are indeed saying that you are getting top tier returns from these regional investments?
Top class.
The dude you picked to run that fund was J.D. Vance. But your book has no mention of him. Have you broken up with Vance since he? went MAGA?
He was with us for about a year, but then he moved to Ohio. I haven’t spoken to him since he announced his candidacy, and I haven’t supported that campaign. I am surprised by some of the things he has said.
You hired him partly because of his sense of bringing the country together. But he seems to have used that to promote himself before taking a completely 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 supported. Occasionally we talked about politics, and the things he talked about don’t seem to fit with what he’s saying now. In terms of what we asked him, he was helpful. These bus tours we did were not something red-against-blue. While our efforts are political in terms of which economies we save, and when working on government innovation initiatives, I’ve always tried to stay out of politics.
Your book promotes immigration. In Silicon Valley, an incredible percentage of founders were born outside the US. I’m not sure if the same is true for the emerging regions you’re promoting.
Those cities are more diverse than you think. Miami comes to mind, with a robust startup community where the majority of entrepreneurs come from other parts of the world. Atlanta, Baltimore and Washington DC have a much higher percentage of black entrepreneurs than you would 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 that there will not be an immigration policy as hospitable to people as it has been for the past few centuries. We need to build a bipartisan support for immigration reform.
