The Great 38™️: Unlocking Growth Through Virtuous Capitalism
Rebalancing America’s Innovation Economy: How the Great 38™️ Can Transform Entrepreneurship, Capital Flows, and Inclusive Growth
The United States is experiencing the biggest wave of entrepreneurship in modern history. Between 2015 and 2019, Americans filed about 3 million business applications annually. By 2023, that number had surged to 5.5 million—the highest ever recorded.
This is a story of resilience and reinvention. But it’s also a story of inequality.
Meet the Great 38™️
We call them the Great 38™️: the South, Midwest, and Mountain West states that are home to two-thirds of the U.S. population. These states include powerhouse cities like Atlanta, Dallas, Minneapolis, Phoenix, and Nashville, along with hundreds of rural communities fueling agriculture, manufacturing, and energy.
Despite their economic diversity and demographic strength, the Great 38™️ remain chronically under-capitalized. They produce more than one-third of venture-backed startups, yet receive less than 20% of venture capital. The result? Trillions in untapped potential.
A region rich in talent—but short on capital
The Great 38™️ is home to the majority of America’s women, Black, Hispanic/Latinx, Indigenous, and LGBTQ+ entrepreneurs. These founders are building companies, often in overlooked industries like logistics, health care, and advanced manufacturing. But they operate outside the dense investor networks of the coasts, meaning they must work harder to secure funding and scale.
This gap isn’t just unfair—it’s costly. Racial discrimination alone is estimated to have cut U.S. GDP by $16 trillion between 2000 and 2020. A disproportionate share of that loss fell on the Great 38™️. Closing gender and racial gaps in entrepreneurship could add hundreds of billions of dollars annually to the region’s economy.
AI is reshaping the landscape
In 2025, AI startups captured nearly two-thirds of total U.S. venture value. But while AI mega-deals dominate headlines, the real opportunity for the Great 38™️ lies in applied AI—tools that make local industries more productive.
Manufacturing: Generative design, predictive maintenance, and digital twins.
Agriculture: Precision farming, water optimization, and supply-chain forecasting.
Health care: Telehealth, revenue-cycle automation, and clinical decision support.
Logistics: Route optimization, warehouse robotics, and demand sensing.
These are the backbone sectors of the Great 38™️—and AI is the lever that can transform them.
The rise of micro-economies
Economic uncertainty, geopolitical shocks, and federal dysfunction are pushing communities to become more self-reliant. Across the Great 38™️, we’re seeing micro-economies emerge: ecosystems of talent, capital, and supply chains that keep growth local.
Cities like Tulsa, Columbus, and Birmingham are investing in accelerators, workforce development, and venture funds. The goal isn’t to mimic Silicon Valley—it’s to build resilience rooted in local strengths.
Why virtuous capitalism matters
At DVRGNT, we believe in virtuous capitalism: a model where profits and know-how are reinvested into overlooked communities and founders. It’s not charity—it’s smart economics.
Imagine if even a fraction of the billions that leave these states in federal tax outflows were redirected into local innovation funds. We could double venture activity in the Great 38™️ without spending a single extra federal dollar.
Supporting diverse founders isn’t just the right thing to do. It’s the growth opportunity of our generation.
A call to action
The Great 38™️ have the people, industries, and ideas to lead America’s next chapter of growth. What’s missing is equitable access to capital and structured early-stage support.
The question for investors, policymakers, and business leaders is simple: What might happen if we finally invested in the people and places that built America?
The future of American innovation isn’t confined to the coasts. It’s already taking shape in the Great 38™️. Now it’s time to fuel it.
We’d love for you to join the conversation:
For Investors:
What products have you seen gain unexpected momentum because of their cultural cachet, maybe even through a surprising media alignment?
For Founders:
Are you building a product with inherent cachet that's ready to capture the imagination of tastemakers, especially from the Great 38? We want to hear from you.
Apply at the link below to learn more about our founder-first approach.
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