August 14th, 2018

South Bend Investor Leads Push to Engage Silicon Valley

At the end of February, Max Brickman of Heartland Ventures and South Bend Mayor Pete Buttigieg were among the ambassadors who helped welcome a bus full of Silicon Valley VCs to their Midwestern turf during what was coined the “Comeback Cities Tour.”

Organized by Rep. Tim Ryan of Ohio, the reasons for the West Coast investors’ visit to South Bend; Akron and Youngstown, Ohio; and Detroit and Flint, Mich.; were to meet local officials and scout promising startups in overlooked areas of the country. But would a brief detour in South Bend truly engage a venture capitalist?

It’s been five months since the bus rolled out of town, and Brickman reports that the momentum hasn’t slowed. Heartland Ventures, where he is a founder and managing partner, is now co-investing in a San Francisco-based company after meeting one of the visitors, Lan Xuezhao from Basis Set Ventures in San Francisco. The good impression the tour made on Xuezhao is only getting stronger.

“I’m impressed by the entrepreneurial spirit and landscape in South Bend, including the speed at which the community adopts new technology. We’re excited to work together with local companies, VCs and Mayor Pete’s team to support the continued growth of the local ecosystem,” Xuezhao says.

Before the tour, Xuezhao had never stepped foot in South Bend. But after she saw the city and met Brickman, the two reached a deal to co-invest in Workstream, a SaaS company focused on improving how employers hire hourly workers. Workstream hired a head of sales in South Bend a week after the deal closed. Its CEO, Desmond Lim, is a graduate of Harvard University and the MIT Media Lab, and makes frequent visits to check in on the Indiana team.

“Their expectations are low, and the amount of activity going on here is exciting,” Brickman says of investors who rarely venture from West and East Coast opportunities. “They are beginning to feel like they’re missing out on a lot of the deal flow around the country.”

Heartland Ventures’ model is creative in its approach to improving the entrepreneurial landscape of the South Bend-Elkhart area. The firm only invests in companies on the coasts that would be a good fit to expand in Indiana. To date, three of five companies in its portfolio have relocated or set up secondary operations in the state, where they didn’t have a presence before.

Across Indiana, the startups employ about 24 people whose salaries are much higher than St. Joseph County’s $43,040 average household income. Heartland Ventures serves as a recruiter of sorts, stymying brain drain from Notre Dame and attracting top talent.

Brickman is also making an impact as a board member of Startup South Bend-Elkhart, the organization created as a result of Elevate Ventures’ partnership in the region. The group is focused on assisting regional startups with a goal of 25 reaching a funding/revenue threshold each year, and they are on target to reach that goal in 2018.

To help them get there, Startup South Bend-Elkhart is bringing together disparate resources spread across the region to make them more easily leveraged by the entrepreneurs who need them. Recent major steps forward have included setting up Notre Dame’s “IDEA Center” accelerator program to give founders a clear path forward to grow their businesses.

Brickman’s interest in entrepreneurship began early. At age 14, he founded a general contracting company in his hometown of Milwaukee, which he grew to 450 residential units. He then left Wisconsin to attend college at Indiana University Bloomington. When he wasn’t in class, he was working as CEO and founder of both CleanSlate and Peloton Investors. Through CleanSlate, Max developed a chemically engineered paper to prevent cheating on fill-in-the-oval Scantron tests, and then licensed the technology to an international company.

Brickman also met his girlfriend — now fiancée — Haylee Gedek, at IU. After graduation, she enrolled in a doctoral program at the University of Notre Dame, and Brickman followed.

“I unexpectedly fell in love with the area,” he says. Notre Dame’s programs and the city’s initiatives under Buttigieg, affectionately known as “Mayor Pete,” were appealing, including the development of the downtown’s now thriving Urban Core and upcoming launch of the city’s new Technology Resource Center.

When Brickman arrived, he saw an opportunity to move the needle. When you’re able to bring a handful of startups to the South Bend market, it can make a difference, unlike in San Francisco, he says. He co-founded Heartland Ventures with partners Brad Toothaker and Ryan Rans a year and a half ago.

It was more than just city leadership and a shortage of startup activity that gave Brickman the confidence to build Heartland Ventures. It was also the city’s culture.

“There was a willingness to take a chance on me and support the fund,” he says. Promoting the Midwestern mentality and values also benefit Heartland Ventures. He emphasizes the region’s people as very hard working, collaborative and open-minded.

“That combination works well for entrepreneurs who are trying to get traction and need help from other people. People here see that young entrepreneurs can benefit the community, and they are willing to help them succeed.”

And now, it seems, investors in Silicon Valley and beyond are getting wise to the Midwest’s appeal.

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