Steve Case tries to make money with founders outside of Silicon Valley; his plan begins to work

Steve Case, co-founder of America Online, investment firm Revolution, and its seed-stage subsidiary Rise of the Rest, has released a new book titled Rise of the Rest: How Entrepreneurs of Surprising Places are Building the New American Dream. In it, Case argues that Covid has been a "world-shaking" moment for entrepreneurship, and that power will never again reside as it once did in cities like San Francisco, New York and Boston. /p>

We spoke earlier today with Case about the book; we also spoke with him about the coastal investor mentality, his political aspirations, and the status of his relationship with Ohio Senate candidate J.D. Vance, who worked closely with Case at one point ( they appeared together at our TechCrunch Disrupt event in 2018).

Case also talked about a number of his bets, which have, perhaps to the surprise of skeptics, taken off since he started investing across the country. He also suggested that a major piece of advice he tries to impart when speaking with founders is the art of storytelling itself. (A powerful narrative can go a long way, especially when you're out of the crosshairs of some of the most powerful investors in the country.)

Further excerpts from our conversation follow. These excerpts have been edited for length and clarity. (You can hear the longer conversation here.)

TC: You've been on a mission since 2014 to bring more attention to founders across the country, traveling some 18,000 miles through 33 cities. With Covid gone, are you back on the road now or have you finished this chapter?

SC: [this national tour] is the result of efforts a little over 10 years ago; President Obama asked me to chair an initiative called the Startup America Partnership. And that led me to focus on regional entrepreneurship and this imbalance that we talked about before in terms of how 75% of venture capital dollars [went] to just three states. And the more cities we visited, the more cities we wanted to visit. We obviously had to stop when the pandemic hit and we haven't restarted yet in terms of physical tours. But we spend a lot of time traveling across the country. The Rise of the Rest team, now numbering a dozen people, has visited dozens of cities over the past six months.

Chris Olsen of Drive Capital in Columbus, Ohio told us a few weeks ago that while his company laid the groundwork for more VCs to come to the area, the reverse happened after Covid, that they retreated to the ribs. Do you see the same?

[I think] while some may retreat into a tougher environment and focus more on their existing investments, I think we have reached a tipping point during the pandemic, and that will mean an acceleration of the flow of capital to more cities and more entrepreneurs in those cities.

Most people in most parts of the country, if they wanted to be part of the innovation economy, thought they had to go where they had to go to the coast. It's started to slow down over the last five years and picked up in terms of people moving during the pandemic, [which] ended up being kind of a snowballing time for society, and also for many families. They've kind of reassessed how they want to live and work and where they want to live and work, and that's likely to result in a permanent momentum.

Where did Rise of the Rest invest the most money?

We've done 200 investments in 100 different cities, so that's pretty broad. And we see a dynamic in very many cities. Indianapolis is an example of a city that most people don't really know what's going on there [and one of the reasons is a] flagship company there, ExactTarget. It was acquired [in 2013] by Salesforce for $2.5 billion and at the time had 1,000 employees. Today, Salesforce has 2,000 employees in Indianapolis, and [it's] the second largest Salesforce office outside of San Francisco. The founder of this company and many of the first employees of this company started new companies.

We've also seen interest in places like Richmond, Virginia; we supported a company called TemperPack which focuses on sustainable packaging. In fact, they started in New York, but decided to move to Richmond to expand their manufacturing capabilities, and they later raised $140 million in one round l...