Included in this week’s “Beyond VB” section is an argument from John C. Austin at the Brookings Institution about how the Rust Belt still needs more capital in order to create more tech jobs.

Many of the ecosystem builders I’ve spoken to disagree on how much of a role capital plays in building a strong entrepreneurial ecosystem. But there’s one point from Austin’s article that I think a lot of ecosystem builders can get behind: Getting more capital to the Heartland starts not with getting more Silicon Valley VCs out here, but with convincing Midwest institutions to invest more in their own backyard.

Austin cites a recent article from the Detroit Free Press that finds that since 1998, the University of Michigan has made just one investment in a Detroit-based money manager, a private equity firm. Here in the Heartland Tech section, Refinery Ventures’ Tim Schigel has argued that university endowments should invest more of their dollars into venture capital funds in order to support local founders.

Additionally, a 2010 study found that VC firms received 47 percent of their money from pension funds in the Upper Midwest — even though just 12 percent of VC dollars was invested in startups in the same area.

I’m curious to hear if this is a topic that’s generated much discussion in your own communities: how to get more legacy institutions investing in Midwest VC funds.

Thanks for reading, and as always, please send me your thoughts via email. You can also sign up here for VentureBeat’s Heartland Tech newsletter to get this column in your inbox weekly.

Anna Hensel
Heartland Tech Reporter

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