May 9, 2024 - News

Trillions in venture capital meet in the middle of the U.S.

Steuart Walton talks to a group of venture capitalists from a stage.

Steuart Walton (right) speaks at the MidCon VC Summit. He was interviewed by Paul Gatling, editor of the Northwest Arkansas Business Journal. Photo: Worth Sparkman/Axios

An estimated $1.5 trillion of investable capital was represented by attendees of the Midcon VC Summit held in Bentonville this week, its organizer told Axios.

  • That's not a typo — it's a "T."

Why it matters: It's proof that what once was a cluster of small towns with a few big companies is on its way to becoming an innovation cluster.

  • Entrepreneurs need capital to grow and investors want to minimize their risks. To stay on a growth path, Northwest Arkansas needs both.

The big picture: There's a slow migration to the middle of the country — of people and companies — from the coasts, where venture capital is traditionally invested.

Inside the room: A headliner at the summit was Walmart heir Steuart Walton, who — with his brother, Tom; his aunt, Alice; and other family members — have helped foster NWA as part of the national business discourse. (See story No. 2 below.)

What he said: Walton largely shared how he and Tom, who together own holding company Runway Group, have invested in NWA — with emphasis on the Bentonville-Bella Vista area. Some key quotes from his session:

  • "We just thought that the community needed to become a magnet for talent," Walton said. "And we didn't really have much of a strategy for that other than trying to make Bentonville cool."
  • "If you don't do financial performance right, it doesn't matter what your impact is because it's not going to be sustainable. But if you only are investing for financial returns, eventually … that begins to kind of wear you out."
  • "For us, the why has always been … about making Bentonville a great place to live, a great place to visit, an attractive place for people to move to that will underwrite — hopefully — the success of our region" and Walmart.

"I think of us as like a triple A-rated startup," Walton said of Bentonville, noting that large cities like Houston and Chicago are well established and sort of like blue chip companies.

  • Middle tier markets — think Austin, Nashville, Denver — are "the recently arrived … like up-and-coming tech companies" that have momentum and a set trajectory.
  • AAA's "are kind of like there's a lot of momentum, there's a lot of excitement, there's a lot of growth, but the trajectory is still a little bit unknown," he said.

"If you think about where you want to invest … the triple A rated startups probably offer the most upside" and that drives Runway's investments in Bentonville," Walton said.

What's next: Cortado Ventures of Oklahoma City convened the second-ever Midcon Summit.

  • Managing partner Nathaniel Harding told us next year's summit will be in Tulsa.
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