Steve Case, the cofounder of America Online, the investment firm Revolution, and its offshoot seed-stage arm Rise of the Rest , has a new book out called Rise of the Rest: How Entrepreneurs in Surprising Places are Building the New American Dream . In it, Case argues that Covid was a “shake the globe” moment for entrepreneurship, and that power will never again reside as it once did in cities like San Francisco and New York and Boston.
We spoke earlier today with Case about the book; we also chatted with him about the mentality of coastal investors, whether he harbors any 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 up a number of his bets, which have, perhaps to the surprise of skeptics, taken off since he began investing across the country. He relatedly suggested that one major piece of advice that he tries to impart when speaking with founders is the art of storytelling itself. (A powerful narrative can go a long way, particularly when you’re out of the sightline of some of the most powerful investors in the country.)
More from our conversation follows. These excerpts have been edited for length and clarity. (You can hear the longer conversation here .)
TC: You’ve been on a mission dating back to 2014 to bring more attention to founders around the country, traveling something like 11,000 miles across 33 cities. With Covid fading away, are you back on the road now or have you bookended that chapter?
SC: It [that national tour] came out of some effort a little over 10 years ago; I was asked by President Obama to chair an initiative called Startup America Partnership. And that got me focused on regional entrepreneurship and this imbalance that we’ve talked about before in terms of how 75% of venture capital dollars [were] going to just three states. And the more we visited cities, the more cities we wanted to visit. We did obviously have to stop when the pandemic hit and we have not yet restarted in terms of physical tours. But we are spending a lot of time traveling around the country. The Rise of the Rest team, which is now about a dozen people, has visited dozens of cities over the last six months.
Chris Olsen of Drive Capital in Columbus, Ohio told us a few weeks ago that though his firm had laid the groundwork for more VCs to come to the area, the opposite happened post Covid, that they’ve retreated back to the coasts . Are you seeing the same thing?
[I think] while some may hunker down in a more difficult environment and focus more on their existing investments, I do believe we hit a tipping point during the pandemic, and that will result in an acceleration of more capital flowing 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, they felt they had to leave where they were to go to the coast. That started slowing over the last five years and picked up in terms of people relocating during the pandemic, [which] ended up being kind of a shake-the-snow-globe moment for society, and also for a lot of families. They kind of reassessed how they want to live and work and where they want to live and work, and that likely will result in a permanent, dynamic.
Where has Rise of the Rest invested the most dollars?
We have through our rides made 200 investments in 100 different cities, so it’s fairly broad. And we’re seeing momentum in many, many cities. Indianapolis is an example of a city that most people don’t really know what’s happening there [and one of the reasons is a] tentpole company that’s there, ExactTarget. It was acquired [in 2013] by Salesforce for $2.5 billion and, at the time, had 1,000 employees. Now Salesforce has 2000 employees in Annapolis, and [it’s] the second-largest Salesforce office outside of San Francisco, and the founder of that company and many of the early employees of that company have gone on to start new companies.
We also have seen interest in places like Richmond, Virginia; we backed a company called TemperPack that focuses on sustainable packaging. They actually started in New York City but decided to move to Richmond to […]
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