Midwest technology investors have spent the past decade trying to attract venture capitalists from Silicon Valley and the East Coast to homegrown startups.
An early-stage investor from Indiana who’s expanded to Columbus turns the model on its head. What excites Max Brickman about the Midwest is the concentration of potential customers to attract coastal startups.
Brick founded Heartland Ventures three years ago in South Bend, Indiana, investing from its first $15 million fund in coastal startups rather than Midwestern ones – while helping expose large Midwestern companies to those emerging technologies. Its typical investment is $500,000 to $1 million.
“There’s a lot the Midwest can offer to coastal startups,” he said. “I believe a lot of these coastal startups should have staffed offices in the markets where their customers are, not just for sales but for feedback.”
To date, the fund has set up some 114 introductions creating potential customer relationships or product feedback. In one case, a California maker of HR platform software opened a northern Indiana satellite to be closer to customers. Brickman wants to bring the same effect to Central Ohio. (Heartland also announced Wednesday it’s making a similar expansion into Indianapolis.)
“We looked at 15 cities while we were looking at expanding,” Brickman said. “Columbus was incredibly collaborative. We were able to connect with people relatively quickly.
“The region is already familiar with venture capital and the value it can provide. But there’s also a huge concentration of Fortune 2000 type companies in Columbus. It’s incredible how many of those businesses are based there.”
Brickman started a real estate business at 14 and founded an educational software company that was acquired. He moved to South Bend while his future wife pursued a doctoral degree at the University of Notre Dame. He’d intended to move to Silicon Valley afterward to pursue venture capital.
Then, like others, he saw the VC opportunities in the Midwest, although from the customer perspective.
“Honestly I kind of fell in love with South Bend,” he said. “There’s a ton of successful privately owned businesses that have a ton of expertise and a ton of buying power in certain industries and are major consumers of technology.”
But what they don’t have is exposure to technology emerging on the coasts, so Heartland Ventures tries to bridge that gap. The exposure also makes legacy corporations more comfortable with startups – and likely to invest in them, whether on the coasts or in their own back yards.
Brickman is splitting his time between South Bend and the Industrious co-working space in the Short North. It’s a two-for-one deal: His wife, Haley Brickman, is a child psychologist continuing her clinical training at Nationwide Children’s Hospital, which is greatly expanding behavioral health programs.
Columbus VC firms Drive Capital and NCT Ventures said in written statements they welcome new funds to the region. Brickman said the firms have already helped with introductions.
“NCT has spent nearly two decades trying to assist in building an ecosystem to attract venture capital investors and entrepreneurs,” said Bill Frank, NCT partner, via email. “So to have another group join the family of investors is great thing and healthy for our region.”
