A growing number of investors and venture capital firms are recognizing that all the smart people weren't born in the Bay Area or New York City. One of the cities raising the most money in the Midwest as a result of this realization is St. Louis, where startups raised a combined $634 million in venture capital from 2015-2017.
One of St. Louis' most successful startups is Varsity Tutors, an online tutoring company that recently raised $50 million in its Series C round. One of the investors in that round was the Chan Zuckerberg Initiative, the education-focused foundation started by Facebook founder Mark Zuckerberg and his wife, Priscilla Chan.
(Facebook itself also has a growing presence in St. Louis, having been a stop on Mark Zuckerberg's recent tour of Middle America. The company also hosted an event in the city called "Community Boost," which focuses on helping small businesses utilize Facebook, and announced a partnership with Claim Academy, a coding boot camp based in St. Louis.)
While the investment by the Chan Zuckerberg Initiative is a significant achievement, Varsity Tutors was already a success prior to its Series C round. Founder and CEO Chuck Cohn launched the company while still in college, using a $1,000 loan from his parents. That $1,000 has paid off. Today Varsity Tutors has 40,000 tutors teaching more than 1,000 subjects. Participating students have received more than three million hours of tutoring.
The company's reach has also extended well beyond St. Louis, with offices in Seattle, Phoenix, and Canada. Cohn and his team also recently purchased a British tutoring firm, and plan to aggressively expand into foreign markets, including China.
"The size of the foreign market, especially Asia, dwarfs the domestic market," said Cohn. "That's where we see our greatest potential for exponential growth."
Varsity Tutors would be a successful startup story regardless of where it was located. In a relatively short period of time, it has become one of the dominant companies in a rapidly growing industry. That sort of achievement would be considered a success in St. Louis, in Denver, or in Pittsburgh.
And it would be considered a success in Silicon Valley.
It is, without a doubt, harder to raise money and harder to get noticed in a city like St. Louis.
(Or Denver. Or Pittsburgh. Or just about anywhere else that didn't inspire an HBO sitcom.)
But it is not impossible.
The success of Varsity Tutors shows that a good idea, a visionary founder, a talented team, and a gap in a market can create opportunity, regardless of geography. And the more than half a billion dollars raised in St. Louis over the past three years shows that investors--including Mark Zuckerberg--are paying attention to Middle America.
In other words, you don't have to leave your hometown to build a great startup.
You just need a great idea that delivers value to customers, and enough grit to turn your vision into a reality.