Daniel Einhorn, brother of hedge fund manager David Einhorn, is betting that all the Silicon Valley talk about a bubble in venture capital is just that -- Silicon Valley talk.

Last year, Daniel Einhorn launched his Milwaukee-based venture capital firm, Capital Midwest Fund, with $40 million, in hopes of taking advantage of the region's burgeoning start-up scene and hard-working residents, the New York Times reports.

At a time when Silicon Valley law firm Cooley reports that entrepreneurs are driving ever-harder bargains with the venture capitalists who would fund them, Einhorn thinks he can turn the tables. Money from Capital Midwest comes with an unusual string attached: All portfolio companies are required to provide an exit within five years. Those that can't do so must buy back their shares from Capital Midwest.

So far, Capital Midwest claims an internal rate of return of 43% on its first fund, the Times says. However, some don't view Midwest Capital's strict requirements as conducive to growing a business.

"I think having that rigidity is unwise and will likely cause decisions to be made that may or may not be in the best interest of the company," Lorne Tappa, controller at Milwaukee-based IT company New Resources Consulting, told Inc. "Setting abitrary timeframes and deadlines is bad investment policy."

Teresa Esser was a general partner at Capital Midwest Fund from 2009 to 2011. She wouldn't say why she left the firm, but Esser, now the managing director at Silicon Pastures Angel Investment Network in Milwaukee, notes that in general, venture capital is becoming less attractive to the entrepreneurial community. She cites a recent Kauffman Foundation study that criticized venture capital firms for a decade of poor returns and a lack of transparency.

Midwest Capital was not available for comment at press time.