A new fund wants to help boost Midwest startups.
Comeback Capital announced Tuesday that it has closed on a $2.25 million fund that aims to invest in startups outside the coasts. The fund will be led by Scott Shane, an angel investor and professor at Case Western Reserve University in Cleveland, Ohio.
The fund follows the Comeback Cities Tour, a bus tour put on by Congressmen Tim Ryan (D-OH) and Ro Khanna (D-CA) earlier this year, which the New York Times coined the "Rust Belt Safari." The idea was to connect Silicon Valley investors with entrepreneurs in some of America's overlooked startup hubs.
The result of that bus trip across the heartland is now the Comeback Capital Fund, a pre-seed fund that aims to bridge the divide between Silicon Valley investors and Midwestern startups. Investors in the fund include Patrick McKenna of High Ridge VP, Bloomberg Beta, and prominent Midwest investor gener8tor.
Comeback Capital is eyeing startups in Chicago, Northeast Ohio, Southeast Michigan and Pittsburgh.
"Capital should be mobile," Shane said in a statement. "Startups serving customers in the Midwest should not move to San Francisco to raise money and then try to serve customers in Youngstown, Detroit and Indianapolis from California. The capital should move here instead."
Comeback Capital's launch comes as the venture capital community increasingly sets its sights on Midwest startups. Steve Case's Rise of the Rest Fund aims to back non-coastal startups with its $150 million fund, and Drive Capital is investing $300 million in Midwest startups after its founders Mark Kvamme and Chris Olsen left Sequoia Partners in Silicon Valley for Columbus. And with more and more California and New York firms investing in the Midwest, Victor Gutwein, managing director of Midwest-focused VC firm M25, believes all major VC firms will have an office in Chicago in the next five years to connect with top companies in the region.
Correction: This post has been updated to reflect that Case Western Reserve University is based in Cleveland, not Akron.
