Inauguration Day, 2016 (Rob Carr/Getty Images)
Donald Trump moved into the White House four years ago as Americans debated a growing divide between the so-called coastal elites and basically everybody else. Trump's populist rise to power came as a rude awakening to the venture capital industry, which has concentrated its investments on coastal tech hubs, and to Silicon Valley, a progressive-leaning place where his rival had more support.
- The dearth of VC activity in America's heartland symbolized discontent—and a disconnect—with the heavily funded, rapidly growing technology industry. "The reason they feel left behind is because they have been left behind," said Steve Case, whose Revolution Ventures seed fund focuses on deals outside the big tech hubs.
- Some investors sought to address that gap on several fronts. They earmarked capital for underserved parts of the country, promoted new tech hubs and ventured outside their bubbles to extend their networks. But did the overall investment picture change?
- Not very much, according to PitchBook data. For all the talk of boosting VC investment in the heartland, the yearly share of total capital deployed in the US has remained about 18%, excluding deals done in states with the biggest tech hubs. That's about the same as it was before Trump was elected.
- Seen through an electoral lens, some major battleground states that Trump won twice did see significant investment gains in absolute terms. In 2020, Texas startups pulled in $3.74 billion through Nov. 10, up from $2.12 billion in 2016.
- Several key states that Joe Biden flipped to his column—like Pennsylvania, Georgia and Michigan—all steadily attracted more venture capital since Trump was elected.
- Despite Trump's populist backing, his administration was long on "photo ops" but didn't make a big commitment to reordering the investment landscape, says Case, adding: "Given the bloc that put him in the White House that was so frustrated around jobs, I was surprised there wasn't more of a response." —Alexander Davis