Approximately eight years ago, investors Mark Kvamme and Chris Olsen decided to leave Silicon Valley and establish a venture firm, Drive Capital, in Columbus, Ohio. This was not a straightforward decision. Departing California wasn’t widely considered a popular move at the time. In fact, while Olsen was originally from Cincinnati, the Yale graduate had secured a position at Sequoia Capital shortly after college—a highly desirable job—and had no intention of relocating. Meanwhile, Kvamme, a native Californian who attended UC Berkeley, was deeply familiar with the startup landscape (his father was also a venture capitalist) and had previously co-founded four companies before joining Sequoia, where he spearheaded the firm’s investment in LinkedIn.

Even after a series of events prompted them to make the move, the initial phase presented challenges. A robust venture capital community was lacking. Midwestern startups were relatively uncommon. Furthermore, Kvamme, initially drawn to Ohio by his long-time friend John Kasich for an economic development role he anticipated would be temporary, was soon perceived as having close ties to the state’s influential figures.

In retrospect, it’s remarkable that they persevered. However, their decision to remain is precisely why Columbus is now well-positioned for further venture capital investment, they assert. Indeed, Drive, which currently manages $1.2 billion and employs nine investors, receives inquiries from 7,000 startups annually, and several of its portfolio companies are experiencing significant growth. The firm’s first investment, Olive AI, an eight-year-old Columbus-based hospital software company, recently achieved a $1.5 billion valuation in a funding round led by Tiger Global. Another investment, Root, a five-year-old car insurance startup, also shows considerable promise. Root became a public company in November and currently has a market capitalization of $4.7 billion, with Drive holding a 26.6% stake in the company. (Olsen notes that they have not sold any shares.)

Late last week, we spoke with Kvamme and Olsen about their vision—and why venture capitalists considering a move from California to Austin or Miami should give Columbus greater consideration. The full conversation is available here. The following are excerpts from our discussion (edited slightly for brevity and clarity).

TC: Many are contemplating leaving California. What is the rationale for choosing Columbus? How did Mark persuade you to join him, Chris?

CO: Mark’s initial argument centered on the substantial amount of funding allocated to research in this region. In Silicon Valley, the proportion of venture capital to research funding is disproportionately high; the reverse is true in Ohio. This mirrors the landscape of Silicon Valley in the late 1990s.

Initially, I was skeptical and believed the data was flawed, and that relocating was a poor idea. However, I am fundamentally data-driven—and remain so—and when I examined the figures, I discovered that Ohio’s economy is larger than Turkey’s. The economy of the Midwest would rank as the fourth-largest globally. It surpasses Brazil, Russia, and India in size. Moreover, it possesses a well-established educational infrastructure that consistently produces more engineers than any other region. It became clear that if this hypothesis held true, emerging markets might represent the most attractive investment opportunities for venture capitalists. Perhaps the most compelling emerging market is actually within America, just beyond Silicon Valley.

TC: Did you have a wide range of companies to choose from when you initially launched Drive? Has that changed in the current environment, with more deals being conducted online? What types of companies are you seeing now that you weren’t a few years ago?

CO: Surprisingly, we didn’t have an abundance of options when we first arrived, largely because being a venture capitalist was uncommon in Ohio. Consequently, many entrepreneurs were located in less-conventional areas. Unlike Silicon Valley, where entrepreneurs follow a well-defined path from Y Combinator to seed and Series A investors, that infrastructure didn’t exist here. We found ourselves dedicating significant effort to identifying investment opportunities in the Midwest, not because entrepreneurs weren’t present, but because the necessary support systems were still under development.

We invested considerable time engaging with universities, supporting new seed managers, and assisting them with fundraising—essentially building this infrastructure from the ground up to encourage entrepreneurs to remain in the region rather than relocate. In our first year, we received interest from 1,800 startups, which increased to approximately 3,000 and now stands at around 7,000—more than I’ve heard many venture firms in California report. I don’t believe this is due to our exceptional abilities, but rather a reflection of the growing potential here. We would welcome more venture capitalists to join us, as there is clearly more opportunity than we can address alone.

TC: Are you concerned that attracting more VCs will lead them to compete with you for deals?

MK: Not at all. As the more experienced member of the team, I recall the early days of Sequoia in 1972; my father collaborated with Don Valentine and National Semiconductor, followed by Kleiner, Perkins, NEA—just a handful of firms. What happens is you create a network effect. The more capital available and the more individuals building businesses in close proximity, the better. Currently, if we choose not to invest in a Series A round, there are a few local options, but the majority of funding typically comes from the coasts.

CO: I believe others should join us because the current issue is that significant investments are still not being made due to their location. The challenge we face is that a firm like Redpoint invests in one company in Ann Arbor, Benchmark in Indianapolis, or Sequoia in a local deal, but they aren’t fully committed to this market. Until we see more venture capitalists establishing a permanent presence here and declaring, “This is our sole focus,” I fear we will miss out on promising opportunities. We are currently imbalanced in terms of the number of opportunities versus the number of venture capitalists available.

[Additionally,] some of the most successful investments in Silicon Valley involve venture firms that collaborate, providing entrepreneurs with access to a broader network, a larger capital pool, and a diversity of perspectives—all essential for business growth.

TC: You’re vying for attention with other hubs like Austin. What is the specific case for Columbus?

MK: A one-day drive from Columbus encompasses 60% of the American GDP, over 50% or 60% of the population, and access to a substantial portion of all major customers. Columbus is centrally located. We can easily travel to cities like Chicago, Indianapolis, Pittsburgh, Cleveland, and Cincinnati, and it’s a short flight to Minneapolis, and so on. The Midwest is an excellent location for building companies.

TC: Drive’s team includes a director of engineering and several software engineers. Why is that?

CO: One thing you quickly learn about the Midwest is that it’s not a single city; it’s a region. You must adapt your infrastructure accordingly to succeed in investing across this region because there’s a lot of geographic area to cover.

We realized that there are many routine, repetitive tasks that venture capitalists perform. We asked ourselves, what if we could automate those tasks, eliminating the need to hire a large number of Ivy League graduates to make cold calls and inundate entrepreneurs? We could then focus on more in-depth research. So, we developed a software platform that allows us to identify entrepreneurs with the highest potential for investment, as well as individuals for our portfolio companies who are most likely to join a particular startup, or which venture capitalists are most likely to participate in a subsequent funding round.

TC: You had the opportunity to redefine the VC model when you started your own firm. What did you do differently at Drive compared to your experiences at Sequoia?

MK: We were fortunate to have worked at Sequoia. In my opinion, Sequoia is the best firm in the industry. We often ask ourselves, “What would Sequoia do?” and we built many things around that principle. However, we weren’t Sequoia, so there were many things we had to do that Sequoia may have accomplished 40 or 50 years ago but no longer needs to address today. This includes building the capabilities Chris mentioned earlier, establishing infrastructure, and assisting lawyers with Series A term sheets or finding recruiters.

We also operate differently from Sequoia in that everyone isn’t coming into the office; they see a lot of wonderful companies that just contact them directly. That’s why we had to be very focused on our proactive efforts. I would say that 60% to 70% of what we’ve done we learned at Sequoia, but the rest we had to tailor to our specific situation here at Drive.

TC: How broad is your geographic focus?

CO: Currently, it’s very extensive. Our portfolio includes companies in Denver, Washington, Atlanta, Toronto, and Austin. We’re discovering that this opportunity is a broader trend that we’re investing in.

Before we invest in any of these cities, we follow the same process we used in Columbus. We meet with landlords, because landlords here aren’t accustomed to working with startups. They cater to established companies, requiring five years of financial statements and a substantial security deposit. We’ve also engaged with headhunters. There are excellent headhunters in Ohio, but they differ from those successful in Denver or Atlanta because talent networks are highly localized.

Now that we’ve established infrastructure and a concentration of companies in many of the cities I mentioned, we can provide more than just quarterly board meetings. We’ve built a partnership where we’re investing people and resources, and we’re present in these cities on a weekly basis.