Steve Case, J.D. Vance try to lure venture capitalists to rural America with $150 million investment fund, bus tour

Steve Case and J.D. Vance (CBS image)

Steve Case, the billionaire co-founder of America Online, is trying to get more venture capitalists to invest in often-overlooked smaller towns and cities in the middle of the country. His main weapons: a $150 million investment fund and a "Rise of the Rest" bus tour designed to lure news coverage, Sharyn Alfonsi reports for CBS's "60 Minutes."

Most venture capital is invested on the coasts, Case said: about 75 percent in California, New York and Massachusetts. In an effort to bring more attention to "flyover" states, Alfonsi reports, he and his team have traveled to dozens of cities in 26 states on a bright red tour bus, looking for promising ideas that Silicon Valley has overlooked.

In the past year the fund has invested in more than 100 companies in 63 cities and towns. Not only that, a few big names in business have offered funding and advice to entrepreneurs, including members of Walmart's Walton family, former Facebook president Sean Parker and former executive chairman of Google Eric Schmidt, Alfonsi reports.

People in the middle of America "have been forgotten," Case told Alfonsi. "It's not about a feeling about being left behind, they have been left behind. We have to kinda level the playing field so everybody everywhere really does feel like they have a shot at the American dream. Right now, they don't."

The Rise of the Rest tour bus (CBS image)

J.D. Vance, who wrote the bootstrappy bestseller Hillbilly Elegy, agrees with Case so much that he helped develop, run and raise money for the Rise of the Rest Fund. Vance told Alfonsi that many people who live on the coasts seem to assume that small-town residents are stupid and that "the only people who live here are the people who are forced to live here," which he said is not true. And though Vance doesn't think the tour will transform any town's economy, he said the initiative is part of a larger movement to bring more economic prosperity to the middle of the country.

That means places like Pikeville, a town in far Eastern Kentucky that has been hit hard by the opioid epidemic and the decline of coal. Rise of the Rest invested in a project there to build high-tech greenhouses on top of former strip mines, Alfonsi reports. The greenhouses, which will be staffed by well-paid recovering opioid addicts, will supply fresh, affordable produce to surrounding areas. That ticks several boxes: it helps keep addicts productive so they won't be tempted to use again, it pumps money into the local economy, and makes it easier for locals to access affordable fresh vegetables.

A local high school student told Alfonsi he hopes the project takes off: "There's not anything here right now. And I hope and pray for our community that something does come back here, but as of now it's impossible for all of us to stay even though 90 percent of us want to, and be able to live the kind of lives where we could support ourselves and our family too."

Vance said he hopes so too, and hopes that projects like the one in Pikeville will show outsiders that investing in such communities is worth it. "We shouldn't just accept that the story should be one of decline," Vance told Alfonsi. "And that's what I think -- you know, at its core, what Rise of the Rest is about is refusing to see the worst in any place. We want to see the best."

UPDATE, March 27: The publisher of the Appalachian News-Express in Pikeville, Jeff Vanderbeck, had some problems with the report. Here is his column.