In his recent book, Jason Calcanis answers the question: “do you have to be in Silicon Valley to be a good angel investor and invest in good companies,” with one word, “yes.” In fact, he makes it an entire chapter. But the angels, venture capitalists, and thriving startups of the Midwest would beg to disagree, and there are recent growth stories to prove it.
Lessonly, which announced its Series B this week and is a leader in the learning software industry, is just one example of the rising trend of startups based in the Midwest, particularly Chicago but also including Indianapolis and Detroit, raising large venture-backed financings.
“We really take pride in a core Hoosier value: neighbors who help others. Our clients tell us how much our software has improved their learning, their productivity, and their people. And their direct feedback helps us improve our product and contribute to a better learning experience for Learners everywhere. That’s the way we do things in the Hoosier State,” said Max Yoder, Lessonly CEO. “I’m super excited to see Yellowship [Lessonly’s new conference] come to Indianapolis. The Lessonly team continues to impress and inspire me–and I’m sure that this conference will do the same,” added former ExactTarget CEO Scott Dorsey, now a partner at High Alpha, the venture capital firm that served as an early investor in Lessonly.
There are certainly key advantages that can help a company thrive in the Midwest, as opposed to relocated to Silicon Valley. First among them is a far lower cost of living, plus lower salaries due to employees. Indeed, by some estimates, a Chicago startup could have a burn rate of 50%+ less than a Valley startup, with the same employee headcount and office size. This in turn enables companies to push toward breakeven and profitability faster, which in turn reduces the failure rate of venture investments. Read the full story here.