Youngstown Venture Capital Investment

When pondering the best way forward, I think checking out another city in a similar position is useful. Grand Rapids, Michigan is bigger than Youngstown, Ohio. But consider the apples-to-apples comparisons concerning venture capital investment:

"A lot of venture capital funds are coming to Michigan," said Jody Vanderwel, president of Grand Angels, a venture capital intermediary. Investors "know there's some great ideas coming out of the universities that are just waiting to be commercialized."

Vanderwel's argument is backed up by data comparing Grand Rapids' venture capital investment to other Michigan cities in the past 10 years. While Kalamazoo ($41 million) and Detroit ($76 million) don't have substantially higher amounts of venture capital investment, Ann Arbor's $558 million is an eye-opener.

Mike DeVries, managing director of Ann-Arbor based EDF Venture's Grand Rapids office, said the report underestimates the venture capital in West Michigan because many private investments are not divulged.

But he adds Grand Rapids' culture is not conducive to large-scale, high-risk venture capital investments compared with Ann Arbor, where the University of Michigan produces many entrepreneurs in the pharmaceutical and biotechnology fields.

Grand Rapids, relative to other communities in Michigan and "comparable markets" outside of the state, is struggling to spark a vibrant startup economy:



















Columbus, Ohio catches my eye. Similar major research university cities Madison and Ann Arbor tower above Columbus in terms of venture capital investment. The graph suggests to me a problem with Ohio. I can't see why Columbus can't rank with the likes of Ann Arbor or Madison. Cities with major research universities near the core should attract substantial venture capital. What's wrong with Columbus?

If the problem has something to do with the political economy of the State of Ohio, then Youngstown is in a strong position. Youngstown can effectively leverage three political geographies: Ohio, Pennsylvania, and West Virginia. Also, it sits almost exactly halfway between regional urban powers Cleveland and Pittsburgh. And for that matter, Columbus is close enough to also be in the picture. Furthermore, Youngstown State University is a close neighbor of the central business district. That's not quite the University of Michigan in the middle of Ann Arbor, but Grand Rapids is optimistic that it can benefit greatly from a similarly-positioned Grand Valley State University. Perhaps now you can understand why I think the Youngstown value proposition is so strong.