Q&A with AOL founder Steve Case on his prediction that tech companies will flourish in the US heartland, the current investment slowdown, J.D. Vance, and more
and grilling him on what why he ghosted JD Vance (who led Case's heartlands venture fund) in his book. https://www.wired.com/... Ted Leonsis / @tedleonsis : .@SteveCase on #RiseOfRestBook and the growth of startups outside Silicon Valley. My first company was founded in Vero Beach, FL. AOL was founded in Northern Virginia. Both companies had to secure funding & services from the Valley or NYC or Boston. (1/2) https://www.wired.com/...
Context & Ripple Effects
Steve Case has spent two fund cycles arguing tech's next wave rises outside Silicon Valley: the first $150M Rise of the Rest fund drew backing from Jeff Bezos and Eric Schmidt in 2017, and a second $150M vehicle followed in 2019. This Wired Q&A lands at a harder moment — Case now has to defend that thesis against the current venture investment slowdown while also fielding an awkward personal question: J.D. Vance, who led his heartlands fund before co-founding Narya, alleges in his book that Case ghosted him.
The interview also surfaces the structural weakness Ted Leonsis names plainly — startups founded outside the Valley, like his own in Vero Beach or AOL in Northern Virginia, historically still had to secure funding and services from Silicon Valley, New York, or Boston. That dependency is exactly what Case's funds were built to break, and it frames both the slowdown answer and the Vance friction.
First-order effects
- Case's portfolio companies face the same capital squeeze as coastal startups during the slowdown, but with thinner local follow-on funding — making Rise of the Rest's continued deployment the difference between survival and forced coastal exits for its founders.
- The public airing of the Vance ghosting allegation puts the fund's most famous alumnus under scrutiny just as Vance's VC track record — including AppHarvest's lawsuits and bankruptcy — is already being reexamined.
Second-order effects
- Rival investors skeptical of regional venture get fresh ammunition: if the slowdown forces heartland startups back to Valley, NYC, or Boston for rescue capital, Leonsis's historical dependency argument reasserts itself and weakens the case for third-party money following Case's model.
- Vance's move from leading Case's fund to politics means every heartland-thesis debate now carries a political subplot, raising the profile — and the stakes — of any future Rise of the Rest fundraising round.
Third-order effects
- If heartland-backed startups weather this downturn without coastal bailouts, venture's geography genuinely decentralizes; if they don't, the pattern Leonsis describes hardens into permanence and regional funds remain feeder systems rather than full-stack alternatives.
- The Case–Vance split previews a broader realignment where heartland-focused capital becomes entangled with political identity, pulling what was an economic argument into a cultural one.
The trend: Venture capital's geographic concentration is being stress-tested by the investment slowdown, with Case's Rise of the Rest thesis serving as the standing bet that the next cycle mints winners outside the coasts.