Guest Post: Iowa's brain drain isn't a mystery

Our state universities are the bedrock of innovation in the state, boasting such inventions as the first computer at ISU, medical innovations in oncology, cardiology, radiology, and more at Iowa, and insurance and financial modeling at UNI, just to name a tiny handful. We file an incredible number of patents for the multitudes invented or discovered here. Yet, issued patents is a vanity metric because what really matters is commercialized patents. And for that we need the inventors and entrepreneurs to come together and invest their blood, sweat and tears to bring those inventions to market. Many such endeavors need capital, something that remains in short supply across Iowa. So, our entrepreneurs go to the capital on the coasts, where, incidentally exists another of our assets - money.

Iowans generously donate to the endowments at our colleges. Endowments whose primary purpose is to honor donor intent (e.g. funding scholarships, buildings, programs) and to exist in perpetuity. Perpetuity, meaning forever, requires that endowments grow above the rate of inflation, maintain a diverse asset allocation, and spend no more than 4% each year. This endowment investment model includes investments in risk assets (e.g. real estate, commodities, venture capital) as well as risk free (e.g. bonds). It is the venture capital investment that flows out of our state into national venture funds requiring our entrepreneurs to seek those funds elsewhere.

The Senate File 2453 that has passed the two chambers and now sits on the Governor’s desk seeks to resolve that very item and is the subject of a wonderful guest post, an op-ed that appeared in the May 17 Des Moines Register. I hope you give Zach’s post a full study. Zach Veigulis is the co-founder and Chief AI Officer of Claimable Inc., an AI-powered health insurance appeals platform based in West Des Moines. He holds a B.A. in Health and Human Physiology and an M.S. in Business Analytics from the University of Iowa and is a graduate of Lincoln High School in Des Moines.

I am grateful to him for allowing me to share his thoughts on this Substack.

I grew up on the south side of Des Moines, graduated from Lincoln High School, and earned my bachelor’s and master’s degrees from the University of Iowa. Today, I’m the co-founder and Chief AI Officer of Claimable Inc., a venture-backed artificial intelligence startup based in West Des Moines that helps patients appeal denied health insurance claims. We’ve been covered by NBC News, Bloomberg, Forbes, and Fast Company’s World Changing Ideas list. Nearly 90 percent of our technical team are graduates of Iowa’s three regent universities.

I say all of that because I want the Board of Regents and Governor Reynolds to understand exactly who is asking them to sign Senate File 2453 into law, an Iowan who stayed, who built something here, and who is watching far too many of his colleagues make the decision to leave.

There is a common misconception that a venture-backed startup is just a small business with a flashy pitch deck. It is not. A traditional small business generates revenue from day one and grows incrementally. A venture-backed startup is built to scale rapidly, often at a loss in the early years, with the expectation of creating significant economic value, jobs, and returns over a compressed timeline. To do that, startups raise capital from investors, typically venture capital funds, in exchange for equity. Without that capital pipeline, most of the companies that created Silicon Valley, Boston’s biotech corridor, and Austin’s tech scene would never have existed.

This model is not a coastal curiosity. It is the proven mechanism for turning university research, technical talent, and entrepreneurial ambition into high-growth companies. Iowa has all three ingredients. What it has historically lacked is a local venture ecosystem large enough to keep that energy from leaving the state.

The numbers are not ambiguous. According to a 2026 report from the Common Sense Institute Iowa, the state has forfeited an estimated $96 billion in cumulative earnings over two decades due to the out-migration of public university graduates. Only about half of all graduates from Iowa’s three regent universities remain in the state ten years after receiving their degree. The University of Iowa’s ten-year retention rate sits at just 37.7 percent.

In 2023 alone, Iowa lost a net of 3,445 college-educated young adults between the ages of 25 and 29. The state ranks seventh nationally and first in the Midwest for net out-migration of young degree-holders. Iowa has invested roughly $255,000 in combined public and private resources to educate a single student from kindergarten through a regent university degree. When that student leaves for Chicago, NYC or San Francisco, that investment leaves with them.

I have watched this play out within my own team. Brilliant engineers, data scientists and technical leaders who grew up in Iowa, trained at Iowa schools, and genuinely wanted to stay here had to weigh a difficult reality: the opportunity they were looking for simply did not exist in Iowa. We were lucky enough to offer them something compelling. Most Iowa startups cannot say the same, because without a mature local venture ecosystem, most Iowa startups never get off the ground.

Critics of SF 2453, including some legislators and the Board of Regents itself, have characterized this bill as a “tax” on university endowments, an act of government confiscation, or a violation of donor intent. That framing is wrong, and it obscures what the bill actually does.

Iowa’s regent university endowments already invest in venture capital. As Rep. Taylor Collins noted during House debate, those investments are currently directed primarily to coastal-based funds, including Commonfund Venture Partners on the East Coast. Those funds deploy capital into startups concentrated in California, Massachusetts, New York, and Texas. The endowment returns funded by Iowa donors and Iowa taxpayers are compounding the wealth of coastal economies.

SF 2453 asks Iowa’s public universities to redirect just one percent of their unrestricted endowment assets into Iowa-certified innovation funds, funds specifically designed to support the commercialization of university research and Iowa-based startups. The bill was carefully amended to apply only to unrestricted pooled assets, to allow foundation boards to grant one-year waivers when market conditions warrant, and to give each institution full discretion over timing and structure.

Twenty-eight states have created some form of state-sponsored venture capital program because they recognized a simple truth: ecosystems don’t build themselves. Iowa has tried to compete without one. The results speak for themselves. SF 2453 doesn’t force universities to do anything they aren’t already doing. It asks them to do one percent of it here.

I did not move to the coasts. I built a company here, hired here, and am investing my own career in proving that Iowa can be a home for high-growth technology companies.

People have started calling it the Silicon Prairie. We’re working on it. But the talent is already here, and so is the will. What’s been missing is the capital infrastructure to keep both of them from leaving.

SF 2453 is a step toward fixing that. One percent of unrestricted endowment assets redirected toward Iowa innovation funds is not a risk. It is an investment in the students Iowa is already funding, training, and then watching drive away on I-80. If we want to keep the AI in Iowa, we have to give it somewhere to land.

Governor Reynolds has an opportunity to sign a bill that would begin building the infrastructure Iowa’s innovation economy needs. The Board of Regents’ registering against the bill is an institution protecting a status quo that hasn’t worked.

Iowa grows its own talent better than almost anyone. It is time we started growing our own opportunities for them, too (emphasis mine-Tej).