Networks, Indianapolis, and Outside the Valley

I woke up this morning thinking about networks. Geographic networks in particular.

Our Partner Fund strategy is to connect with and support both our peers and the next generation of emerging venture managers. We’ve now supported 27 managers across multiple funds. When you think about this group of individual GPs, it’s a really powerful network of investors, influencers, and connectors. You can cut this network across multiple vectors, but I woke up this morning thinking about geography.  

Perhaps geography is on my mind given travel. I was lucky enough to spend a great day in Indianapolis with team High Alpha last week. I will admit to having low expectations of Indy. It was my first trip to the city and I wasn’t sure what to expect.

What I found was a thriving city of 2M+, with more beauty and hustle than I would have guessed. It clearly didn’t hurt that I was seeing Indy through the eyes of Scott, Mike, Blake, and Eric (I was jealous that Kristian had a “gone fishing” sign up on his door). The High Alpha team is a very important part of the ecosystem and have a deep and high profile talent network spread throughout the city and region given their prior successes. I was able to visit with a number of their portfolio companies and hear updates on all their studio companies, most of which are growing up right there on Monument Circle in the heart of the city. We had an excellent dinner at Vida and took a quick drive up Massachusetts Avenue to see their future home in the Bottleworks district. What a great place to call home.

I came away convinced that High Alpha can leverage their position in the Indy market to build great companies, right there at home. Not just with the homegrown talent that already is found in Indianapolis but that it’s a vibrant market where they are able to recruit the best and brightest. This generation of entrepreneurs and company builders understands that opportunities exist outside the valley and great companies can be built in places that offer a quality of life at a lower cost of living. You can build a company with much less capital and the same quality of talent.

It shouldn’t come as a surprise to you that Foundry Group has a broader view of venture than Boston, New York, and the Bay Area. My partners helped grow the Boulder/Denver ecosystem and Brad literally wrote the book on Startup Communities. Our Partner Fund approach allows us to participate and invest across many important and thriving markets. These network nodes are on top of our direct investments that are national in reach.

We have great partners and networks in cities such as Seattle, Toronto, Los Angeles, Minneapolis, Austin, and Detroit. Each of these cities is a case study on talent and networks where we are lucky to have one or more partner funds as a node on that network.  I should also mention Techstars, where the MDs are key contributors in attractive markets such as Atlanta, Kansas City, and across many important corporate accelerators. We still love Boston, New York, and the Bay but we are seeing more and more talent recognizing that opportunities exist outside those markets.

Later this week, Moody is leading a group of our CEOs to Birmingham where city leaders have rolled out the red carpet to highlight the rich talent pool and beneficial cost structures of building a company in Alabama. It’s good to see Moody engaging with the local stakeholders in Birmingham to expose the opportunity set for both homegrown companies and for some of our coastal companies to create a secondary base of operations. We think that almost all coastal companies of scale will have a secondary base outside of their home market.  Why not Birmingham? Or any other number of secondary markets that are embracing the tech economy?

We are deep in the flow of managers that are raising funds in these markets and while we can’t invest with all of them, we are excited to see so many new funds forming. I’m thinking of local funds in Madison, Omaha, and Des Moines that have reached out recently. We want to support those where we can’t invest and hope to spread the #Givefirst approach to growing local communities. Now, off to LA today and Fargo tomorrow. Lucky me.