2017 Prediction: Venture capitalists will start to obsess about Omaha and Minneapolis

As originally posted on LinkedIn by Laura Lorenzetti Soper in The The 50 big ideas for 2017: What to watch in the year ahead.

In the U.S., venture capital dollars have long been geographically concentrated. Last year, more than three-quarters of venture capital dollars went to just three states: California, New York and Massachusetts.

Our most entrepreneurial graduates followed that money, creating a financial ecosystem in which the best innovators and investors congregated in just a few places. But that cycle is starting to change. Elected officials, investors like myself, and entrepreneurs are mobilizing in places like Detroit, Omaha, and Minneapolis to create opportunity and promote entrepreneurship. It’s what I call the Rise of the Rest, and it’s a trend I fully expect to accelerate in 2017.

Here’s why: First, in this next wave of innovation, the Third Wave, entrepreneurs will use technology to revolutionize sectors like healthcare, education and agriculture. To do that, founders will want to be in places where the relevant expertise is located — likely not Silicon Valley. Second, many Third Wave companies will benefit from partnerships with Fortune 500 companies, most of which have headquarters away from the aforementioned coastal tech hubs.

Third, the election was a wake-up call. It brought to light the lack of opportunity in places often disregarded by the tech and business communities. We are already witnessing the growth of access to capital from crowdfunding, local angel networks and regional microfunds. I expect more investors and tech leaders to start paying attention to what is happening in other parts of the country in the coming year. And in doing so, the barriers to entry will be lowered for all entrepreneurs, regardless of background or geography.