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Editor鈥檚 note: This article is part of Something Ventured, an ongoing series by 附近上门 News examining diversity and access to capital in the venture-backed startup ecosystem. Access the full project here.

Although it seems like venture dollars abound in the U.S., with headlines of $1 billion raises and new funding totals hitting highs, not every area of the country sees a flood of investment money for its startup ecosystem.

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Through the first 10 months of this year, 11 states still had yet to break the $100 million barrier when it comes to the total amount of venture capital startups in those states received, according to 附近上门 data. While California startups have taken in nearly $120 billion in venture this year, Mississippi has barely surpassed the million-dollar mark.

This year, along with Mississippi, the states of West Virginia, South Dakota, Alaska, New Hampshire and Hawaii have not seen even $50 million of venture come into the startups that call those states home.

鈥淓very city has always wanted to be like Silicon Valley,鈥� said , president of the Hawaii Venture Capital Association and cofounder at accelerator program . 鈥淭hat鈥檚 always really hard to replicate.鈥�

However, areas like Texas, North Carolina and Georgia have come closer to copying that success, while other areas have clearly been left behind. And while it may be easy to write off many of the states that struggle for venture dollars as having smaller populations or being less affluent, those in the venture capital ecosystem there see potential, even if results are still hard to come by.

The Magnolia State

moved back to his home state of Mississippi 19 years ago鈥攁fter time in both the corporate and entrepreneurial worlds鈥攖o take a position at , which looks to accelerate startups and drive entrepreneurship throughout the state.

While he believes some venture numbers are underreported for the state鈥攁s many in-state startups decline to disclose what they raised, he said鈥攈e is honest about why the state has relatively low numbers.

鈥淲hen you talk about venture capital in Mississippi, you are talking venture with a small 鈥榲鈥欌�� said Jeff, now president and CEO of . 鈥淲e don鈥檛 have any venture capital firms. We just have angels and family offices and individuals, so that鈥檚 one reason.鈥�

The area also has been generally defined by more traditional smokestack industries, like auto, than tech. Still, Jeff said he has seen more startups emerge in the last three to five years as the tech economy continues to proliferate.

鈥淭he question becomes: Can companies effectively grow here?鈥� he said. 鈥淭hat鈥檚 what this really will come down to.鈥�

Startups have been founded in the state, only to eventually leave to find more venture money, talent and, in some cases, just live the Silicon Valley lifestyle. Jeff said 鈥攁n app that lets women buy and sell clothing, shoes and accessories on their phone鈥攊s a good example of a startup from students at the that eventually moved to San Francisco as it looked to grow.

鈥淲e lose these companies at the early or middle stage,鈥� he said. 鈥淭hey go to Austin or New Orleans.鈥�

The other issue the area struggles with, he said, is that there is no true driver for the tech industry in the state since its Worldcom days ended back at the start of this century.

Though Jeff now sees a concentrated focus on some space and marine/blue tech in the southern part of the state along the Gulf of Mexico, the rest is more of a hodge-podge of tech and apps that don鈥檛 have a unifying theme.

鈥淲e don鈥檛 have that focus here, but we would like that,鈥� he said.

Looking for focus

The ability for a startup ecosystem鈥攅specially a young one鈥攖o be able to have a clear driver can be important. That鈥檚 something of has seen before.

Mountain State has two offices, one in Pittsburgh and one in Morgantown, West Virginia鈥攖he latter being in the state that has seen the second-least amount of venture capital dollars flow into it this year at just more than $9 million.

鈥淚鈥檓 surprised it鈥檚 that high,鈥� joked Harbaugh.

A few years ago, the company closed its $20 million seed fund, which took three years to raise. It now has invested in about two dozen companies in the Greater Appalachian region鈥攄efined as the area between western Pennsylvania and western North Carolina. Those investments include four companies based in West Virginia.

Harbaugh, who has been in venture in the area for nearly two decades, said he has seen a real concerted effort to grow the tech ecosystem in the state. That includes the creation of the 鈥攁 public venture capital fund created to develop, promote and expand West Virginia鈥檚 economy鈥攁nd a strong push by the state’s largest school, , which has partnered with noted alumni like former president and CEO to push the industry there forward.

Those efforts have produced some fruit for a still nascent startup community. Morgantown, West Virginia-based , a home inspection company, has successfully raised money. , a neuromorphic all-analog integrated circuit technology developer, is a startup out of West Virginia University and has been able to raise nearly $12 million since being founded in 2015, according to 附近上门 data. While the company has since moved up the road to Pittsburgh, it is still something of a start for the startup sector in West Virginia.

鈥淭his is a marathon, not a sprint,鈥� Harbaugh said. 鈥淲ill West Virginia ever be Silicon Valley? No, and it shouldn鈥檛 try to be. But it can have its own ecosystem. But that only works when you have startups that understand their industry and the market they are in.鈥�

Harbaugh said he has seen focus in the state on areas such as energy鈥攖he has a national lab in the state鈥攁nd life sciences due to the presence of the health system. With a lack of venture firms available in the area, Harbaugh said it would help if the area can develop a sharp concentration on a few areas to lure in very sector-focused funds to invest.

He compared it to how Pittsburgh has become a small but emerging hub in areas like robotics and autonomous driving. While the venture world there is still small comparatively, it is larger than a few decades ago.

鈥淚t took Pittsburgh 20 years to get its VC world moving,鈥� he said. 鈥淚n 20 years, can the entire state (of West Virginia) have the same activity that Pittsburgh is seeing? Maybe, I think.鈥�

Leaving home

Although optimistic, Harbaugh calls it 鈥渞eally difficult鈥� for startups in West Virginia to raise anything above a seed round. That issue, along with the need to hire talent, often lead founders and entrepreneurs to pull up roots from these smaller states with few or no VC firms and look for greener pastures with venture dollars.

James has seen the same in her own home state of Hawaii鈥攚hich has received the sixth-fewest VC dollars this year, and the fifth-fewest in the last nearly six years overall.

鈥淲e鈥檝e seen it before,鈥� she said. 鈥淎s soon as a company starts getting traction, it leaves. It follows the talent and its customers.鈥�

While James helped found Mana Up鈥攖he only accelerator is the only fund focused on Hawaii-located companies, she said, she acknowledges the issues Hawaii faces as a venture hub.

鈥淚t鈥檚 always been traditionally challenging here,鈥� said James, adding that some state tax incentives a couple of decades ago did not help build the sustainable tech ecosystem many had hoped.

However, she remains optimistic by what she sees and hears. There is a growing startup community around sustainability issues in the state鈥攚hich makes sense for an area with limited resources鈥攊ncluding agriculture and energy.聽 James also points to , which was founded in Hawaii about a decade ago, recently going public as an illustration of what the state can produce.

Pandemic changes

James also said she has seen more venture capitalists move to Hawaii, especially during the pandemic鈥攁s where people live has become less important. She hopes that may increase the venture dollars the local startup community will see.

Jeff has not seen more VCs moving to Mississippi, but he does believe the pandemic聽 has brought more interest from out-of-state capital as travel was reduced and meetings were held over .

鈥淚 do think that is changing a little due to the pandemic,鈥� he said. 鈥淚 think you are seeing venture getting more geographically agnostic. I used to hear VCs say, 鈥業鈥檒l invest anywhere; as long as there is a direct flight from San Francisco to there.鈥� Well, you need to get on a couple of planes to get from San Francisco to Mississippi.

鈥淏ut we are definitely having more people reach out to us now,鈥� he said. 鈥淭hat didn鈥檛 happen so much prior to the padmic. I think that is a positive. We need to improve access to capital and talent to have these companies stay.鈥�

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Note: An earlier version of this story misidentified Tony Jeff.