Silicon Heartland Author Gives Buffalo's Richardson Hotel Quite a Few Stars

Talk about a unique experience. I recently stayed at the just-reopened Richardson Hotel in Buffalo, while on my book tour in the city.  

At first glance, you had to be impressed by the majestic, awesomely large structure in a beautiful setting comparable to Central Park on 40 beautifully landscaped acres, in fact designed by the very same Frederick Law Olmsted. The interior was flawlessly clean and spacious with high ceilings, wide corridors, and beautiful wood floors and railings. 

Little did I realize when I checked in that the hotel was a former insane asylum, housing patients up until the mid-1970s.  But I might have guessed from some tell-tale clues. First, some chamber doors in the hallways were closed off, painted over so you could barely notice. Second, the rooms were extra small. Mine actually was a combination of two rooms. Third, most of the rooms had minimal views. Mine overlooked another wing of the building. Then, some of the vast structure was still empty, in need of repair.  In this section of the building, balconies were caged in, a remnant of the past (presumably to prevent suicidal jumps?). Not that hotel was hiding its past -- historical photos of Buffalo's maritime glory days, including many of this landmark dating back more than 100 years, lined the walls.   

All this noted, I liked the hotel. It has a great story, fitting well with the theme of my new book,
Silicon Heartland.  The staff was extra-friendly (everyone I met in Buffalo was!) The Richardson is conveniently located, nearby the (also) just-reopened AKG Art Museum, which I toured. 

And, everything functioned well! Super-speedy wi-fi connections, great water pressure, good heating-cooling controls, a well-equipped business center, and well-lit spaces. You could argue that's not much, but I can tell you that luxury hotels get many of these basic points wrong. There was plenty of space to roam along long and winding corridors, most of them still not occupied while renovations continue. The restaurant was not open yet during my stay but a cafe served pastries.  

The hotel, which used to be called the Henry, went into receivership in 2021, a victim of the pandemic. New owner Douglas Jemal, a local real estate developer, took it over in 2022, and are investing $57 million in campus renovations. Jemal rebranded the hotel as the Richardson, after original architect Henry Hobson Richardson. He also owns Seneca One, the city's tallest tower, where my book talk event was held with community leaders, including former Congressman and now real estate developer Chris Jacobs. 

I would definitely return for another visit, but I'm glad I caught it now at this early stage of development before all the tourists arrive.   
by Rebecca A. Fannin

Shuffle Off to Buffalo: An Artsy Review of a City in Transition

 In the days of vaudeville, back in the 1920s, entertainers would usually want to include Buffalo on their circuit of theaters.
Buffalo was among the biggest markets in the country, one of the largest cities, and rich enough to have its own theater district, with several grand venues.
New York City was the big brother to the South, and got most of the attention, but the residents of Buffalo were proud of their City. And they wanted to be a cultural oasis, with theaters, museums and beautiful parks.
Once the Erie Canal was completed in 1825, Buffalo became a hub of commerce. It incorporated as a City in 1832, and by 1862, the Buffalo Fine Arts Academy was founded (years before the Metropolitan Museum in New York City).
That Academy eventually was transformed into the Albright-Knox Art Museum. a very respectable regional museum with a very good collection of modern and contemporary art.
But the Albright-Knox needed to expand as its collection grew, and the Museum launched an ambitious multi-million-dollar expansion.
With a generous donation of $65 million from financier (and Buffalo resident) Jeffrey Gundlach, they hired the Office of Metropolitan Architecture (OMA) headed by Shohei Shigematsu, with Executive Architect Cooper Robertson, to transform the museum.
OMA has added 30,000 square feet to the original museum, providing large spacious rooms for large contemporary paintings. With the new addition, Albright-Knox, now named Buffalo AKG Museum of Art, has a jewel box of a setting for some of its prize contemporary paintings, including 35 works by abstract painter Clyfford Still. Still is considered one of the leading abstract expressionist artists, and he donated many of his large master paintings to Buffalo AKG. Now they can all be viewed in three large galleries.
The addition and expansion have a light-filled bridge to the original collection, a nice transition between the neo-classical Greek structure of 1905 by EB Green.

contributed by John D. Delmar

Some 8,000 Road Miles Later, Silicon Heartland Book Launches with Loads of Endorsements

After two years of research and some 3,000 miles logged in my Honda Element on a road tour through the Rust Belt, my new book, Silicon Heartland, is launching. 

Kevin Stevens, Editorial Director, Imagine Books
(distributed by Penguin Random House)

Change is sweeping across the American
heartland. For too long ignored as “flyover
country,” the once-mighty Midwest is
experiencing a quiet but compelling revolution
powered by savvy venture capital, high-tech
innovation, entrepreneurial boldness, and good
old American moxie. What has been known
as the Rust Belt is now developing the shine
of a tech belt. The former pinnacle of the US
economy is making a comeback, which bodes
well not only for the heartland but for our
economy and morale nationwide.
Rebecca A. Fannin explored this twenty-first century
transformation from the inside. And
she did it the old-fashioned way—by putting
hard miles on her Honda Element and visiting
women and men from Flint, Michigan, to
Huntington, West Virginia, who are planning,
financing, and building this latest version of
the American Dream. A heartlander herself,
Fannin brings readers on an investigative tour
that starts in her hometown of Lancaster, Ohio,
and takes in six states, dozens of cities, and
hundreds of enterprises.
Silicon Heartland tells the story of a comeback
journey—and also personal stories of some of
the remarkable people Rebecca met who are
restoring the region’s vibrancy and prosperity
with a social and economic turnaround that
is diverse, contemporary, and solidly realized.
What Rebecca discovered on the way—about
America, about her family, about herself—
is surprising and inspiring and makes her
book timely documentation about a reviving
economy and also a moving reminder of the
importance of family and heritage.

Thanks for the endorsements! 

“No place or company is immune from getting disrupted – and Silicon Valley is no different. In Rebecca’s new book, Silicon Heartland, she explores the tech innovation frontier emerging in states that were once centers of commerce but were left behind when they didn’t adapt to new technologies. Silicon Heartland underscores how my home state of West Virginia – and other Appalachian locations – are progressing by investing in entrepreneurship.”
— John Chambers, Founder and CEO of JC2 Ventures, and former Executive Chairman and CEO of Cisco Systems

As an investor and venture capitalist who moved to Austin, Texas several years ago, I find Rebecca Fannin’s compassionate and rigorous analysis of entrepreneurship a must-read. She asks and answers so many of the right questions: how we got here, where we’re going, and what needs to happen to revitalize communities and democratize innovation. This will be an indispensable book for founders, investors, and change-makers.
— Jim Breyer, Founder & CEO, Breyer Capital

“In Silicon Heartland, Fannin details the technology transformation underway in our heartland — masterfully weaving together years of research and knowledge with personal stories from people across America. It’s a book that inspires hope for our future.”
— Ro Khanna, author of Dignity in a Digital Age

“Silicon Heartland, Rebecca Fannin’s uplifting journey into America’s all-too-often overlooked Midwest – where she, herself, grew up – is a compelling counter-narrative to the depiction of the region as being in the grip of post-industrial decline. This is the untold story of the Rust Belt rising, amid a wave of optimism, innovation and old-fashioned grit.”
— Maëlle Gavet, CEO of Techstars and author of Trampled by Unicorns

Silicon Heartland shines the light on exciting examples and best practices that are leveling the playing field of opportunity and unleashing new opportunity. This book is a must-read for anyone who believes that entrepreneurial success is only possible on the coasts. The Silicon Heartland welcomes you!
— Brad D. Smith, President Marshall University and former Chairman and CEO, Intuit

“From an author with America’s heartland in her blood and a keen observer of global innovation, this book is a tremendous resource to help communities across the country tap into their entrepreneurial roots and reinvent themselves.”
— Greg Becker, president and CEO of SVB and graduate of Indiana University

“Silicon Heartland provides an almost perfect sequel to Ms. Fannin’s must-read Tech Titans of China. Now she brings the focus back to our nation’s shores, but rather than detail the assumed decay of American greatness, she instead finds hope. The green-shoots of a potentially innovative and prosperous future have been planted for generations to come. This book provides a much-needed boost of optimism at a time when it’s vitally needed.”
— Chris Fenton, author, Feeding the Dragon and Film Producer

In her book Silicon Heartland, journalist Rebecca Fannin journeys back to her home in the Midwest to explore how cities and states are working to reinvent local economies. Her unique perspective will help readers understand the entrepreneurial communities that are working to turn cities between the coasts into promising innovation hubs.
— Steve Case, co-founder of AOL and Revolution and author of The Rise of the Rest

“Finally…someone gets it. The Rustbelt of the Midwest is transitioning to the Tech Belt of the heartland and author/journalist Rebecca A. Fannin tells that story in an engaging and sometimes personal manner. She took time to explore this flyover country to discover an emerging new energy and entrepreneurial spirit that is replacing regional depression. She tells the story of Midwestern rebirth that everyone else has ignored and she does so with the perspective of an experienced journalist. Her writing is crisp and sharp, and her reporting is thorough and in-depth.”
— Tom Hodson, Director Emeritus of the E.W. Scripps School of Journalism and WOUB Public Media

“Silicon Heartland tells stories that should be told. With the move to onshoring, perhaps real dollars will continue to flow - and even increase - across the belt(s). I hope so. Lots of know-how and talent there. Less reason to move elsewhere in this increasingly un-tethered world, and current societal and technological waves benefit from more open spaces and lower costs.”  
— James D. Robinson, Founder & General Partner, RRE Ventures 

“Few journalists I know have truly been ‘out there’ deeply connecting with their subject like Rebecca. Her family’s personal history in the Midwest allows her to truly hear what’s happening.”
— Brian Cohen, Chairman, Science Literacy Foundation/ Founding Partner, New York Venture Partners/ Chairman Emeritus, New York Angels

“Hop into author Rebecca Fannin’s vintage Honda as she cruises through “flyover country,” reporting on what was long considered the rusted remains of America’s industrial might. Except she finds something quite different:  Silicon Valley-style entrepreneurship built on traditional Midwestern values of honesty, hard work, and community.  Without glossing over the challenges, Ms. Fannin provides an insightful look into the rebirth of cities and a region that launched American leadership in the global economy.”
— Dan Schwartz, Publisher, Asian Venture Capital Journal (1993-2008) and author, The Future of Finance

“Silicon Heartland is a fascinating and inspiring read.  Only Rebecca Fannin, with her venture background, China experience, and heartland roots, could uncover the amazing tech revolution occurring in the middle of America.  Rebecca shines a light on how the next generation will transform the region by taking a page out of the Silicon Valley playbook.”
— David Kaufman, Director of Global Strategies, Nixon Peabody

“Silicon Heartland shows how scrappy innovators are remaking the US economy and breathing life back into Rust Belt cities and impoverished rural communities. Fannin does a fantastic job providing both the data and case studies on how a new wave of entrepreneurs and technology are transforming America’s overlooked and under-funded regions.”
— Steve Hoffman, Chairman and CEO, Founders Space

"Mr. Metaverse" And His Web3 Bet Against Facebook

KEY POINTS

• Yat Siu, executive chairman of Hong Kong-based metaverse start-up Animoca Brands, says that as new technology worlds are being built around the Web 3 idea, the biggest threat isn’t regulation but companies like Facebook and Tencent.
• Animoca is valued at over $5 billion, turned profitable in 2021, has over $15 billion in digital asset and token reserves, and is raising another $150 million this month.
• The college drop-out who was born and raised in Vienna as the only child of professional musicians discovered at an early age an affinity for computers, which led to a job at Atari, founding his internet service provider at the age of 20, and selling a previous start-up to IBM.
• Read more at CNBC, by correspondent Rebecca Fannin 

The Silicon Valley fallout from waging economic war against Russia

 Russian politicians and tech leaders started coming to Silicon Valley more than a decade ago to build high-tech bridges but since the Crimea annexation in 2014, venture capital deal-making within the U.S. involving Russia has been declining.

• Still U.S.-based and global VC firms face issues with investments made over the past decade alongside Russian firms and individuals.
• Russia has been angling to make its own Silicon Valley with the Skolkovo Technopark outside Moscow, but now-ended relationships with tech investors and universities including MIT were important.
• Photo: Rebecca Fannin at Moscow's tech park Skolkovo in 2018 to speak at an innovation conference
• See CNBC article on Russia by Rebecca Fannin

The 30-year-old female founder at the forefront of a billion-dollar bet on CRISPR gene editing

Nobel Prize winner Jennifer Doudna is the most well-known co-founder of CRISPR start-up Mammoth Biosciences, but Janice Chen, the sister of U.S. figure skating champion Nathan Chen, is also one of its four co-founders and the chief technology officer.

• Mammoth has added $100 million in big pharma contracts and government grants since the pandemic began, quadrupled its employee count and is still hiring, and saw its valuation rise to $1 billion in a venture deal featuring Amazon and Apple’s Tim Cook.
• Chen has her sights set on reaching a $100 billion valuation as an independent company.
• See CNBC article on CRISPR startup by 
  Rebecca Fannin

Next to the last steel mill in town, a robotic farm grows backed by Pritzker billions

 

KEY POINTS

• Currently less than 1% of fresh produce is grown through hydroponics systems versus open-field agriculture, but this segment is forecast by Mordor Intelligence to grow by nearly 11% yearly to about $600 million by 2025 and Walmart has invested $400 million in Plenty Unlimited.
• Vertical farming start-up Fifth Season is backed by billionaire Nicholas Pritzker’s Tao Capital and planning to disrupt the $60 billion U.S. produce market through food partners include Sabra, Kroger, Shoprite and Giant Eagle.
• “The tech multiplier doesn’t lift all boats but it is spreading in the heartland,” says Congressman Ro Khanna of Silicon Valley.
• See CNBC article on Pittsburgh startup Fifth Season 
  by Rebecca Fannin

Endless Frontiers Can Move the US of A Forward and Compete with China

 

Predictions that China could win the superpower tech race were once considered ludicrous. Now the U.S. is fighting this increasing threat by reinvigorating the U.S. innovation economy with a massive federal agenda to spur the growth of new technologies, startups, and regional innovation hubs. 

China has advanced swiftly in artificial intelligence, 5G communications, electric vehicles, robotics, and other futuristic technologies. Having dominated China’s markets while Facebook, LinkedIn and Google were blocked, Chinese companies also have invested heavily in Southeast Asia and Africa, while Alibaba, Tencent and other tech titans were penetrating Hollywood, Silicon Valley and the Rust Belt before regulatory crackdowns largely halted those deals.      

Anyone who has traveled to China knows or seen the televised Olympics sees the stark comparison with America’s decaying bridges, highways, rails, and airports. China is building for the coming decades.        

China’s swift catch-up to the U.S. in high-tech innovation and R&D is remarkable. China has surpassed the U.S. in patent filings globally, and is gaining on the  U.S. lead in research and development. China’s venture capital market has surged to become the world’s second-largest, and nearly surpassed the U.S. in 2018. China’s ByteDance, the maker of TikTok, is the world’s most valuable venture-backed unicorn, worth $140 billion. Meanwhile, America’s share of global VC spending has fallen to about half from more than 90 percent in the 1990s.

To rebuild and retain America’s technology leadership will take turbo-charging emerging startup ecosystems throughout the country, from the Heartland region as well as the dominant coastal cities. New tech hubs that have sprung up in the midlands such as in Columbus are a starting point in transitioning Middle America’s once-dominant economies from industries of the past to tomorrow’s growth engines. But more support is still needed for many former steel towns, auto cities and coal mining lands that are struggling to latch on to the new digital economy.

Legislation sweeping through Congress ─ the America Competes Act and the U.S. Innovation and Competition Act ─ rightly promises increased funding and resources that can filter into overlooked inland markets. This effort can revitalize coal mining regions of the Appalachians and the industrialized Great Lake states, and even create Zoom towns in remote places.

But federal spending can only go so far. To fully recover from the Rust Belt days, more venture capital investment is needed for the Heartland. Two-thirds of VC spending nationwide goes to startups in California, New York, and Massachusetts.  Only a fraction goes to the midland states.

Increased venture spending in mid-America can drive much-needed development in economic wastelands that still suffer from poverty, drug addiction, lack of opportunities, and hopelessness. This comprehensive approach to rebuild can help the U.S. counter China’s technology innovation gains and restore confidence and pride.    

Traditional jobs in factories are not coming back. What’s needed to boost the former industrialized Midwest is diversification from past industries that went overseas or were automated. This drive forward needs to be accompanied by retraining of blue collar workers for higher-skilled jobs, an increase in vocational education, and more mentors and role models to inspire tomorrow’s tech entrepreneurs. With the right resources, the former Rust Belt can emerge as a Tech Belt. Entire business sectors from insurance to healthcare to transportation can be impacted. 

Intel’s plans to invest $20 billion to build chip-making plants in central Ohio – alongside Google, Facebook, and Amazon data centers ─ sends a strong signal that America is building back. Other specialized tech-centric innovation zones in former Rust Belt cities such as Pittsburgh and Cleveland are gaining strength with technology startups. These innovation clusters have developed in the toughest, most unexpected places, out of necessity. In a Build Back Better challenge initiated by the Department of Commerce, 50 finalists made the cut, including advanced manufacturing hubs in Cleveland and Detroit, information technology in Pittsburgh, and digital health in Louisville.  

Now, increased funding and resources from both the public and private sector can further develop regional tech hubs in new MidAmerican frontiers. To commercialize innovations from this frontier, it will take entire communities, uniting universities, incubators, economic development organizations, and R&D labs. This effort will reshape the digital divide in America, leading to a Silicon Heartland in the center of the U.S. It will speed up the adoption of new technologies. It will spread throughout overlooked regions that missed the tech boom. It will fuel economic growth in still-struggling cities of the Heartland.

The beginnings of this revival are already here: biotech spin-outs from Cleveland Clinic, robotics and autonomous driving breakthroughs from Carnegie Mellon University, and advancements in 3D printing, additive manufacturing from the Youngstown Business Incubator, and security technology in Dayton from the Air Force Research Laboratory. See photo of author standing in front of last steel mill in the Pittsburgh metro. 

Developing innovation zones such as in Cincinnati are getting on the bandwagon too, fostering entrepreneurship, and attracting more millennials and Gen Z’ers who want to live and work there. These districts as tearing down or repurposing abandoned factories, dilapidated buildings and empty shopping malls. They can be turned into massive tech parks like I’ve seen in Shanghai, Beijing and Shenzhen.

It’s urgent that America acts now to maintain its global technology leadership. Building up innovation hubs in the Heartland should be an important part of this rebuild effort. An American prosperity requires that all pockets of America benefit. It’s time that “flyover country” becomes known as “fly in country.”

By Rebecca A. Fannin, author of Silicon Dragon (2008) and Tech Titans of China (2019)

Intel's Big Build-Out In My Home State of Ohio Spurs the Growth of a Silicon Heartland

In a game changer, Intel is investing $20 billion on a new chip manufacturing hub on 1,000 acres near Columbus, the first semiconductor fab in the Midwest, and is hiring 3,000 employees. 

The silicon chipmaker's bold investment will draw more high-tech employment to central Ohio and spur the development of a Silicon Valley in the Heartland. Already, Google, Facebook and Amazon operate  data centers here, in this New Albany rural suburb of Ohio's capital city. My hometown of Lancaster, just 30 miles southeast, has attracted Google too.  

These investments come as Silicon Valley continues to decentralize. With this move toward the interior of the U.S., the old images of Rust Belt and cow towns could fade fast.  

The emergence of America's Heartland as a tech center comes at a crucial time for the U.S. as it fights back China's rise, deals with supply chain shortages, and jobs lost to lower-cost centers in Asia and Mexico. 

The arrival of Intel to the Midwest signals another Silicon territory, like Silicon Beach, Silicon Alley and Silicon Dragon. Call this Silicon Heartland.

Over the next decade, Intel plans to spend as much as $100 billion in eight factories spanning 10,000 acres of farmland. The Silicon Valley-based giant also intends to partner with local universities to foster new talent. This build out will spur the growth of an already budding tech ecosystem in central Ohio.   

Heartland America has been eager to develop new jobs, and has looked to technology and startups as sources. Now budding tech centers are gaining momentum, feeding upon the region's strong universities and research centers, and digitization of traditional businesses in insurance, healthcare and manufacturing. 

A growing number of talented millennials have been drawn away from the coasts and into the center of the country. The attraction is increased job opportunities in more inland startups and emerging businesses. Other factors driving this trend are lower cost of living and the ability to work remotely.  

Columbus is in the forefront of Midwestern clusters that are forming far away from long dominant Silicon Valley. CBus, as it's known, is emerging as the biggest of the once-sleepy giants. The population has surged 15 percent to nearly 900,000 over the past decade, the largest increase of any major Midwestern city. 

The metro's tech cluster is fueled by the arrival of venture firm Drive Capital and its Silicon Valley style. Drive Capital, set up by two former Sequoia Capital partners from California, has invested in dozens of tech startups in 10 years, and is building businesses for the future from healthcare to insurance to robotics. Further sparks come from spinouts at Ohio State University, startup studios Rev1 Ventures and Converge Ventures, and inventions at world-leading research outfit Battelle Memorial Institute, creator of vehicle cruise control and the bar code.    

Ohio Governor Mike DeWine -- and other Midwestern states -- have been angling for a chunk of this new distributed Silicon Valley. The Buckeye state has allocated billions to develop urban innovation districts in Columbus as well as Cincinnati and Cleveland. The goal? Create thousands of jobs in high-tech, healthcare and smart manufacturing, and educate students in science and technology fields. Now, this Intel facility is touted as the single, largest investment in the state's history, and boosts Ohio's economy that suffered when the steel mills and auto factories left. 

The San Francisco Bay Area continues to be the epicenter of venture capital, attracting half of VC spending nationwide. But the sands are shifting. Investment in Silicon Valley startups recently declined to below 30 percent nationwide for the first time in 10 years. Meanwhile, venture deals in the Midwest have quadrupled over the past decade. 

Unicorn-valued startups, high-ticket acquisitions, and IPOs have popped up in Columbus as well as tech clusters in Pittsburgh, Indianapolis, and Detroit. Each city leverages its strengths in technology to specialize. For instance, Pittsburgh is a hub for autonomous driving. Indianapolis is strong in software as a service. Detroit is into advanced manufacturing and electric vehicles.  

Over the past 50 years, Silicon Valley saw its orchards transformed into high-tech parks. Now, central Ohio is starting to see its fertile pastures changed to data-driven centers. It will take some time for the culture to change for more of a risk-taking nature that is common in the Valley.  As an early spotter of major tech innovation trends such as in China with Silicon Dragon, I'm convinced that a Silicon Heartland will show its power.  

Endless Frontiers Can Combat China's Tech Rise

 

Twelve years ago, my book Silicon Dragon cautioned that China could win the tech race. Now the U.S. has finally woken up to this threat. The U.S. is moving in the right direction with the largest national increase in science, technology and manufacturing in generations. It's a build back better plan, and with European allies coming aboard, this bold plan counters China's Belt and Road initiative and five-year economic plans. 

China has been gaining on the U.S. for years. State-led blueprints have advanced China as a powerful innovation nation in important world-changing tech sectors. The Chinese have moved from copying innovations in the West to crafting their own inventions. Leading edge technologies for electric vehicles, smart phones, robotics, biotech, finance, retail and more have been adopted very swiftly in China’s digitally savvy market.

Chinese tech titans Baidu, ByteDance, Alibaba and Tencent have emerged as powerful counterweights to Facebook, Amazon, Netflix and Google, which have struggled or been blocked in China.  China’s BAT, as they’re called, have out-innovated the West in many game-changing consumer and business technologies that rely on artificial intelligence. They’ve bulked up internationally too, investing heavily in Southeast Asia and Africa, and previously in America’s Silicon Valleys before a U.S. crackdown on foreign (read China) ownership of sensitive technologies.  Moreover, China has been pumping money into building its semiconductor capabilities. The world’s second-largest economy has its own ambitions for space technology and quantum computing too.  

And as anyone who has traveled to China knows, the country’s modern infrastructure beats our nation’s decaying bridges, highways and airports. There is no Rust Belt in China like our abandoned factories and depleted downtowns in Middle America. China was starting from scratch. No need to rebuild former industrial cities.  Just build for the future is what China has been doing.

Several worrisome indicators point to a shift in power. China surpassed the U.S. in 2019 in the number of patent applications to the World Intellectual Property Organization, and increased that lead in 2020 to a 25 percent share globally, bypassing the U.S. at 21.5 percent.  Moreover, China is catching up to the U.S. lead in global research and development.  The U.S. has a 25 percent share of global R&D spending while the PRC weighs in with 23 percent and growing strongly, according to the National Science Board.  The National Venture Capital Association finds that America’s share of global venture dollars has dropped from 83 percent in 2004 to 51 percent today, with China as the biggest gainer. China’s ByteDance, the maker of TikTok, is the world’s most valued unicorn at $140 billion.

By passing the Endless Frontier Act, the government will fund cutting-edge science to combat China’s increasing challenge to America’s technology prowess. More U.S. technology innovation will be commercialized to retain our global leadership well into the mid-century. The $250 billion bill increases investment in critical scientific and tech fields, funds R&D and manufacturing of key technologies, and creates 10 regional technology hubs.

With this urgently needed funding, the middle of the country could recover from a long downward spiral of lost jobs. A growing number of inland innovation districts stand to prosper. Specialized strongholds such as biotech in Cleveland and robotics in Pittsburgh already have emerged with state funding and local resources such as the Cleveland Clinic and Carnegie Mellon University.

More national funding and venture capital investment is needed to boost our Heartland markets. Two-thirds of startup investing goes to three coastal states (California, New York and Boston). Meanwhile, seven core states of the Rest Belt and Great Lakes capture only about six percent of venture spending nationwide. This gap needs to be closed.

The well-named Endless Frontier Act will send more resources to down-and-out places that need support the most. It will help the USA reclaim its might.  As I pointed out in my pivotal book in 2008, whoever wins the race to the technologies of the future will be the global economic leader.

By Rebecca A. Fannin the author of Silicon Dragon (2008) and Tech Titans of China (2019).

Ask A VC in US-China Tech Cross-currents: Wei Jiang, CatchLight Capital

 

For this 32^nd episode of Ask a VC Anything, our featured guest was CatchLight Capital Partners founding partner, Wei Jiang. In this wide-ranging discussion with Silicon Dragon’s Rebecca Fannin, we covered the early days of Alibaba and Ebay in China, Wei’s insights into the growing tech rift between the U.S. and China, and how CatchLight is in the thick of U.S.-China tech investing.  
See video replay of our April 28, 2021 show. 

 Laying the Ground
Tighter restrictions on foreign investment in the U.S. led to the creation of CatchLight. As a start, the firm absorbed 12 tech startups in the U.S. portfolio of Chinese VC firm ZhenFund, which is no longer actively investing in America.  CatchLight also has raised a fund to invest in emerging technology companies in the U.S., and those Chinese-invested U.S. companies impacted by the regulations.

U.S.-China Cross-currents
CatchLight’s new fund primarily handles secondary transactions, delving into restructuring cap tables for portfolios with Chinese venture investors. This should keep him plenty busy. Wei  noted that the Rhodium Group estimates that close to 3000 U.S. tech startups have Chinese investors, and the technology sector represents the lion’s share of investment in the U.S. from Chinese funds.  

Focal points
CatchLight typically acquires assets in a bundle but also does primary investments. Having raised an initial $30 million fund, Wei is targeting investment in U.S. companies, primarily those that can leverage his social capital and experience in China. He doesn’t expect to invest in China. Wei predicts more restrictions will be coming for Chinese venture investors in the U.S. 

Big Successes and Hot Areas
Wei has one unicorn in his portfolio, and he says two are on the way. One of CatchLight’s stand-out investments is Dandelion Energy, a fast-scaling U.S. home geothermal energy startup that provides heating and cooling as an alternative. Wei drilled deep into what will be the hottest sectors in the coming years: traditional ecommerce as well as newer social, community, and neighborhood ecommerce. Other areas are education, social, mobile payments, and short form videos.

eBay v. Alibaba - 2000’s
When Wei was VP of Category Management at eBay from 2004-2006, eBay was the giant with a hefty amount of capital and Alibaba was small and nimble. Alibaba ultimately won the market, while eBay stumbled. Wei notes that US companies have gained experience in the Chinese market, and pointed to Uber and Airbnb as examples of China launches with fewer errors.

 

Bio: 
Wei is an early-stage venture partner in Silicon Valley. He has built successful startups in both Silicon Valley and China. Wei has held senior executive positions at leading technology companies including Google, eBay, Intuit, and GE.
His venture fund, CatchLight Capital Partners, is focused on cross-border investment opportunities in tech startups. One of its specialties is to restructure companies’ cap tables to avoid compliance issues.
In mid-2019, he founded Momentor Ventures, an early-stage fund helping entrepreneurs from Silicon Valley and beyond, with a focus on cross-border advising and connecting Xooglers and Stanford grads.
Previously, Wei was a venture partner at ZhenFund for three years until the end of 2019. From 2010-2016, he was also a CMO at Google China.
Wei has a BA in Information Systems from Peking University, his MBA from the William E. Simon Graduate School of Business Administration, and his MS in Medical Statics from University of Rochester. 

Contributed by Mike Weiss

Silicon Global Online: Ask A VC: Candice Brackeen, Lightship Capital

 

For this 31^st episode of Ask a VC Anything, our featured guest was Lightship Capital founder and General Partner, Candice Brackeen. In this conversation with Silicon Dragon’s Rebecca Fannin, we covered Lightship’s selection process and successes, why she made her fund so inclusive, and if the rust belt cities can transition to tech. Here's the video replay of the show with Candice.  

 

Selection Process

Lightship Capital has an inbound and an outbound strategy. For the inbound, everybody comes to Lightship Capital, including their website and online show, Twitch Pitch. On the outbound side, Lightship is sourcing deals with co-investment partners. The firm also has accelerators in Detroit, Cincinnati, and Tulsa. Lightship is a seed and Series A fund and is usually looking for companies approaching $100,000 in monthly revenue. Brackeen notes that for industries like AI, that revenue number is less attainable for a seed investment. It is most relevant in sectors like consumer-packaged goods where proving the model is easier.

 

Lightship’s Winners

 Brackeen was proud to talk about some of her winners. She referenced Healthy Roots Dolls, a startup that helps young black girls better love their hair. They recently sold out on Target.com. Then there’s Proov, a progesterone ovulation test, the first urine diagnostic test for women to test for progesterone levels when struggling with fertility. Proov got FDA approval last year. After starting out in only select Target stores, the company is now launching nationwide. Another one of Lightship’s successes is Kare Mobile, a mobile dentistry company. They were just one van when they went through Lightship’s programming in Cincinnati. Kare is now in ten markets around the country and looking to expand. Kare Mobile is doing a pilot in Detroit right now with Ford Motor Company and Delta Dental giving away a $150,000 mobile dentistry van to an up-and-coming dentist in the area! Brackeen’s last example of investment successes is Haute Hijab, America’s only hijab company for modest dressing Muslim women.

 

Diverse Fund

Although Brackeen is a Black VC, she is not only looking for black founders. She notes that although around 85% of the U.S. is not white men, that’s where most of the funding has gone. She feels confident that by focusing on this 85%, she is in a good position. Brackeen is looking to fund women, people of color, and many other historically underserved groups. Brackeen says she believes we will start seeing more women and people of color closing significantly larger and larger funds. She thinks over the next 10-20 years, these diverse funds will be the ones that are innovating and leading the way, and the ones that don’t diversify will get left behind.

 

Problems with Storytelling

One of the biggest problems in the Midwest, according to Brackeen, is with bragging about their successes. She’s convinced that midwestern states can attract talent and investment just like the coasts, but she notes that entrepreneurs from smaller inland cities need to be taught to tell their story effectively and to dream big.

 

Cincinnati, Brackeen’s Silicon Valley

Brackeen grew up in the economically depressed Toledo, Ohio. She describes the wonder of seeing the skyline and professional sports teams of Cincinnati in contrast with her hometown. So for her, on a relative basis, she calls Cincinnati her San Francisco. Brackeen notes that big-time innovation is happening in the city. Look no further than Procter & Gamble, as well as Kroger. Just because these aren’t B2B SaaS companies, doesn’t mean big things aren’t happening. 

 

Bio: 

Candice Brackeen and her husband, Brian Brackeen, run Cincinnati-based Lightship Capital, a rare venture-capital firm managed by black partners. Lightship has just raised a $50 million fund to invest in minority-led founders in the Midwest and has backed eight startups. Brackeen previously ran the Hillman Accelerator, coaching and mentoring founders, and earlier in her career, she founded her own tech startup in the Heartland.  While the venture capital industry is competing to get into hot deals in Silicon Valley, she is convinced that good returns are coming in overlooked businesses outside the mainstream.  Brackeen has a BA in Economics from the University of Cincinnati.

-- Summarized by Silicon Dragon contributor Mike Weiss

Silicon Global Online: Ask Cap'n Hoff About Surviving A Startup

For this 29^th episode of Ask a VC Anything, our featured guest was Founders Space founder and CEO Steve Hoffman (Capt’n Hoff). In this discussion with Silicon Dragon’s Rebecca Fannin, we covered Hoffman’s constantly changing career path, his views on bootstrapping and giving away equity, and how the largely global business at Founders Space has adapted to Covid-19. See Silicon Dragon video of the show with Steve and Rebecca.

What Thrills Capt'n Hoff?

Hoffman has been an angel investor, an LP, serial entrepreneur, game developer, author, and a TV executive before creating Founders Space. He notes, “I’ve had more careers than cats have lives,” but of all of his experiences, he is most passionate about what he’s doing right now. Hoffman is the CEO of Founders Space, a global startup incubator and accelerator with over 50 partners in 22 countries. Before Covid-19, Hoffman was travelling 70% of the time, between countries, and he actually narrowly missed being in Wuhan for a book signing where the original outbreak of Covid-19 happened.

He is an early-stage investor, so companies that he invests in sometimes don’t have revenue, or even users. He puts a large emphasis on the team. Smart people that are open to ideas and exploration will make up a great team. Hoffman is based in Silicon Valley, and Founders Space has five incubators in China.

 

What’s Hot in China

Hoffman mostly invests in software because it’s easier to scale, retain customers, and monetize. Sometimes they’ll invest in hardware with a strong software complement.  Hoffman continues to be impressed by everything eCommerce and social related coming out of China. Citing the growing buying power of the middle class, established companies like Alibaba, TikTok, WeChat (Tencent), and Pinduoduo are on the cutting edge of their respective industries with massive potential for years to come. Hoffman also notes that cleantech is well-backed by the Chinese government. He adds that it might be easier to be a startup in the industry under the new Biden administration than the previous one. Hoffman remains positive on China in almost every tech sector.

 

Still Bullish on Silicon Valley

Positive views about Silicon Valley remaining the gold standard of tech hubs has been waning.  But Hoffman doesn’t see its status at the top of the food chain changing any time soon. “People like to be in proximity to other people with ideas, and money, and with talent. They have an abundance of that in Silicon Valley now.” He does list Austin, Miami, New York, and Boston as up-and-coming tech hubs, each with their own specialties. Hoffman notes, “the reason cities are big is because ambitious people tend to gravitate towards the geographic place where they can maximize their opportunity.”

 Bootstrapping
With the rough estimate that 95% of startups will fail, Hoffman urges entrepreneurs to think twice about taking money from friends or family. Hoffman also warns to take the hints from the market, “if one of these educated angels will not give you money, there’s something wrong with your business”. If you are going to bootstrap, make sure it can be done with a small team of people, and just their time and talent. Although it isn’t the most common, successes like Mailchimp and Salesforce were bootstrapped startups in the beginning. Hoffman also bootstrapped his first startup. 

Equity
Hoffman acknowledges that the way equity in a company is handled differs depending on where you are in the world. For example, in China, it is expected that the CEO and Chairman keep most of the equity. However, in the U.S., there is a much larger percent of equity given to investors and employees. Hoffman feels strongly that, “whatever culture you’re in, you need to reward people in relationship to their expectations, if you want to retain them.” He believes that one employee can be worth, two, three or even five times a mediocre one! If you have someone that you know is that good, pay up to keep them. Sometimes that means giving them equity.

Bio:
Steven Hoffman, or Capt’n Hoff as he's called in Silicon Valley, is the chairman and CEO of Founders Space (FoundersSpace.com), one of the world's leading incubators and accelerators. He’s also an angel investor, limited partner at August Capital, serial entrepreneur, and author of several entrepreneurial books, including his upcoming title, Surviving A Startup.
A former Hollywood TV development executive and founder of two venture-backed gaming and entertainment apps in Silicon Valley, Hoffman went on to launch Founders Space, with the mission to educate and accelerate entrepreneurs. Founders Space has become one of the top startup accelerators in the world, training startup founders and corporate executives in the art of innovation.
Hoffman has a bachelor’s degree in Electrical Computer Engineering from University of California, Santa Barbara as well as a master’s degree in Cinema Television from University of Southern California.

by Silicon Dragon contributor Mike Weiss

Silicon Dragon Global Online: Ask NLVCs Anything!

For this 28^th episode of Ask a VC Anything, our featured guests were VCs Jeffrey Lee and Fiona Yu, both with Northern Light Venture Capital (NLVC).  In a wide-ranging conversation with Silicon Dragon’s Rebecca Fannin, we honed in on NLVC’s investment approach, its successful portfolio companies in China and Korea, and the firm’s focus on healthcare investing, particularly in China. We also covered how Covid is impacting the VC firm’s dealflow. 
See Silicon Dragon channel on YouTube for a replay of the session. 

 

 An Entrepreneur’s VC
“We are super passionate about early-stage, we don’t fear the lack of revenue, we don’t fear the lack of incorporation,” said Lee, during our fireside chat, outlining NLVC’s investment focus. “You really want to be the people behind the stars, the stars are the entrepreneurs,” he added, echoing another plank of the firm’s strategy, shaped initially by NLVC founder Feng Deng. 
As an example, one of the firm’s top deals was China’s group buying superapp Meituan. Founded by CEO Wang Xing, Meituan jumped in as the 3^rd or 4^th player to capitalize on China’s group-buying craze. It was a fourth startup for Xing, who was known as the cloner of other Internet business ideas.
Lee chronicles that at times, NLVC didn’t know if Meituan would make it to their next stage. But today, in a sign of what’s possible in China tech and venture, Meituan is a public company trading for more than $250 billion.
Background on Meituan and its founder can be found in Rebecca Fannin’s book, Tech Titans of China.  

 

Hot Healthcare In China
Seeing exciting trends in China healthcare, NLVC began enhancing its healthcare investment in the sector five years ago. One-third of the firm’s portfolio deals are in healthcare. Across the firm’s 30 medtech portfolio companies, only 20 percent have FDA approval. To partner Yu based in Shanghai, this signals that investors in China are up to taking more risk on early-stage healthcare investments. While the firm typically avoids deals that involve such controversial issues as personal data collection and genomics, the NLVC partners both view the China/Hong Kong healthcare market, and overall economies, as stronger than that of the U.S. right now.

 

Post 90s Deals
The firm is keen on investments in deals positioned for the “Post 90s,” referring to an urban generation born between 1990 and 1999. In a rundown of post 90s online shopping leaders in China, Yu noted: Alibaba is still the biggest engine to buy things, JD is the biggest for grocery, while Kuaishou, a Chinese equivalent to TikTok, offers a buying option on a social media platform.

Korea Tech
The VC firm’s Korean portfolio company Picky is an example of a post 90s generation play. Jumping on the mega-trend of K-Beauty, Picky is a mobile-first content platform providing customers with authentic information in the $250 billion global beauty space.
To capitalize on the growing opportunity in Korean tech, the firm is looking to raise a Korea-specific fund. 

 

Groundbreaker Female VC
Yu is NLVC’s first female investment partner. She has overseen 16 deals over the past seven years, stemming from her start as an intern, to an associate, all the way to her newly minted partner title. Although China is regarded as having more female VC’s on average than the U.S., Yu is aware of the impact she can make on the industry, particularly considering her expertise in healthcare investing in China.

 

Dealflow: In Person Meetings Still Count
With the adoption of Zoom, Lee points out that it’s now easier for the firm to get initial and follow-on meetings from referrals. Yu remarks that China entrepreneurs and VC’s have had to get extra comfortable conducting business over WeChat and Zoom, but she notes that China’s quicker response to Covid-19 leaves open the possibility for in-person meetings. She believes that face-to-face meetings cannot be completely replaced with Zoom calls.

The pandemic caused several portfolio companies to pivot. An example within NLVC’s portfolio is Coyote, which is focused on breakthrough innovations in molecular diagnostics that brings complex clinical testing directly to the patient. Coyote created 30-minute point-of-contact Covid-19 tests with equipment the size of a carry-on bag. The tests were accessible at airports, hotels, and other public places to quickly test large numbers of people.

 

Bios:

Jeffrey Lee has been involved in technology venture capital and entrepreneurship for 20 years with a primary focus on North Asia. He is a Managing Director at Northern Light Venture Capital, an early-stage technology fund focusing on opportunities in China, which he co-founded in 2005 with Feng Dent. At NLVC, Jeffrey chairs the investment committee and oversees strategic planning, investor relations, and value-add activities for the portfolio.
Previously, Jeffrey worked in strategic and product marketing at Agilent Technologies Wireless Semiconductor Division, the predecessor of Broadcom Limited (NASDAQ: AVGO), working on front-end RF components for high-speed wireless networks. This opportunity stemmed from running business development at Wavics Inc., a venture-backed startup developing advanced GaAs wireless components that was acquired by Agilent.
Earlier in his career, Jeff co-founded an early-stage venture fund focused on South Korea, Newton Technology Partners. Jeff began his career in TMT corporate advisory at Salomon Smith Barney and Jardine Fleming, a Hong Kong-UK based merchant bank.
Jeffrey received an AB in economics from Harvard University and an MBA from the Wharton School of the University of Pennsylvania.

Fiona Yu joined Northern Light Venture Capital in 2014, bringing her 10-plus years of experience and understanding of the healthcare industry, as well as strategic consulting skill set to the firm. Prior to NLVC, Fiona worked for Johnson & Johnson for more than seven years. She also worked in Monitor Deloitte, serving local and multi-national healthcare companies on strategic consulting.
Fiona holds a BS degree from Beijing University of Aeronautics and Astronautics, and an MBA from Duke University.

Summarized by Silicon Dragon contributor Mike Weiss