Hustler Words – Drive Capital, the Columbus-based venture capital firm, has defied expectations, achieving a remarkable turnaround after a co-founder split and demonstrating the potential of the Midwest tech scene. In May, the firm returned a staggering $500 million to investors in a single week, distributing nearly $140 million from Root Insurance shares alone, shortly after exiting Thoughtful Automation and another undisclosed company. This unprecedented liquidity event, according to co-founder and sole managing partner Chris Olsen, speaking to hustlerwords.com from the firm’s Columbus office, is unmatched in recent venture capital history.
Three years ago, Drive faced an existential crisis following the departure of co-founder Mark Kvamme. The split, which surprised investors, saw Kvamme launch the Ohio Fund, focusing on broader state economic development. However, Drive’s contrarian strategy, focusing on companies valued below the billion-dollar "unicorn" threshold, proved remarkably successful. Olsen argues that while billion-dollar exits are rare, multi-billion-dollar exits through IPOs and M&A are far more common, a strategy that underpinned the Thoughtful Automation exit, described as "near fund-returning." Drive’s larger-than-average ownership stakes (around 30%, compared to the Silicon Valley average of 10%), often as the sole venture investor, amplified returns.
Drive’s portfolio showcases both triumphs and setbacks. Early investments in Duolingo (now a NASDAQ-listed company with an $18 billion market cap) and Vast Data (valued at $9 billion) stand alongside the high-profile failure of Olive AI. However, even the Root Insurance investment yielded profits despite the company’s public market struggles. Olsen attributes Drive’s success to its focus on companies outside the hyper-competitive Silicon Valley ecosystem, with offices now spanning six cities. He argues that companies outside Silicon Valley must demonstrate superior business models to attract venture capital, a filter that Drive applies rigorously, even to Silicon Valley-based startups.
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Drive’s investment philosophy prioritizes companies applying technology to traditional industries, such as an autonomous welding company and "next-generation dental insurance," tapping into the vast potential of America’s economy beyond Silicon Valley’s tech giants. Currently managing assets raised before Kvamme’s departure, Drive boasts top-quartile fund performance, with "north of 4x net" returns on its most mature funds. The recent announcement of Erebor, a crypto-focused bank headquartered in Columbus and backed by tech billionaires like Palmer Luckey and Peter Thiel, further validates Drive’s belief in Columbus as a burgeoning tech hub. Olsen concludes that the firm’s initial skepticism in 2012 has been replaced by a growing recognition of the potential for tech innovation outside Silicon Valley, mirroring the trend of major tech figures relocating their operations elsewhere.
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