The venture capital world has always had a hot-and-cold relationship with the Midwest. Investors rush in during boom times, then retreat to the coasts when markets turn sour. For Columbus, Ohio-based Drive Capital, this cycle of attention and disinterest played out against the backdrop of its own internal upheaval several years ago — a co-founder split that could have ended the firm but may have ultimately strengthened it.
At a minimum, Drive achieved something newsworthy in today’s venture landscape this past May. The firm returned $500 million to investors in a single week, distributing nearly $140 million worth of Root Insurance shares within days of cashing out of Austin-based Thoughtful Automation and another undisclosed company.
It could be seen as a gimmick, sure, but limited partners were undoubtedly pleased. “I’m unaware of any other venture firm having been able to achieve that kind of liquidity recently,” said Chris Olsen, Drive’s co-founder and now sole managing partner, who spoke to TechCrunch from the firm’s offices in Columbus’s Short North neighborhood.
It’s a remarkable turnaround for a firm that faced existential questions just three years ago when Olsen and his co-founder Mark Kvamme — both former Sequoia Capital partners — went their separate ways. The split, which surprised the firm’s investors, saw Kvamme eventually launch the Ohio Fund, a broader investment vehicle focused on the state’s economic development that includes real estate, infrastructure, and manufacturing alongside technology investments.
Drive’s recent success stems from what Olsen calls a deliberately contrarian strategy in an industry preoccupied with “unicorns” and “decacorns” — companies valued at $1 billion and $10 billion, respectively.
“If you were to just read the newspapers or listen to coffee shops on Sand Hill Road, everyone always talks about the $50 billion or $100 billion outcomes,” Olsen said. “But the reality is, while those outcomes do happen, they’re really rare. In the last 20 years, there have only been 12 …