Audio version:
Does Iowa have a rising tech scene? Many community leaders may brag about it, but the reality is far more sobering. Liz Keehner, Principal at Next Level Ventures, explains the hard truths that many Iowans probably don’t want to hear—the money simply isn’t there. So is it time to pack it in or double down?
The discussion ventures into uncharted territory many Iowans are reluctant to discuss. Venture investment represents 0.2% of GDP, but generates 21% of GDP in this country, and how much of those returns come home? None. That’s not to say we don’t have successful tech companies based here—we absolutely do, but Iowans contributed almost nothing. Do we want startups here or just more fake “innovation?”
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Venture Capital’s Outsized Impact—And Iowa’s Undersized Share
Venture investment represents just 0.2% of U.S. GDP, yet VC-backed companies drive 21% of it. And how much of those returns come back to Iowa? Practically none. Keehner stresses that while Iowa has produced successful tech companies like RoboFlow, most of the investment that fuels those successes comes from outside the state. The capital is not local, and therefore, neither are the long-term returns. “We’re not creating this flywheel effect because we’re missing out on those quote-unquote high risk opportunities just because we can’t see the applicability”.
Iowa’s Culture of Caution: A Barrier to Startup Success
Cultural reluctance also plays a major role. Keehner notes that Iowa’s traditionally conservative financial culture discourages risk-taking—the very ingredient needed to build innovation hubs. “The risk tolerance here in the Midwest is a lot less so… if we want to encourage actual economic development and job growth, but we also want to encourage our new grads to stay here, we have to work at creating jobs and career paths that are exciting to them”.
So what’s the path forward? Keehner advocates for strategic focus: if Iowa wants to call itself an innovation state, it must back that claim with action. She calls for deeper institutional engagement, more aggressive angel and VC investment, and a narrowed focus on sectors where Iowa already leads—ag tech, bioscience, healthcare, and manufacturing.
The discussion ventures into uncharted territory that many Iowans are reluctant to discuss. Do we want real startups here—or just more fake “innovation”? Keehner challenges listeners to think hard about whether Iowa is willing to evolve or content to be left behind.