Ann Arbor-based Duo Security Inc. is getting a new San Jose, Calif.-based owner, but co-founder Dug Song says he's not taking his magnifying glass off of Southeast Michigan.

Duo Security has agreed to a $2.35 billion acquisition deal with global networking giant Cisco Systems Inc.

The acquisition, believed to be the biggest of a venture capital-backed startup in Michigan history, set experts abuzz with expectations of ripple effects.

It came less than a year after a venture capital funding round that valued the quickly growing cybersecurity firm at $1.17 billion last fall, showing a change in how investors on the coasts view Michigan firms.

Crain's spoke Tuesday with Song, a self-proclaimed hacker who's known for entrepreneur mentorship efforts. The Crain's 2017 Newsmaker and Michigan Change Maker chatted about how his 8-year-old tech firm came to be acquired by Cisco, Southeast Michigan regionalism and what the local startup community is missing — he says the big problem isn't capital.

The transcript has been edited for length and clarity.

Crain's: I want to go back a little, to the time period between now and last fall, when Duo Security was valued at $1.17 billion after a $70 million venture capital round. What happened?

Song: To be frank, we weren't looking to be acquired. We were continuing on our path to build an enduring company, and ... in the (Series D funding round last fall, we) had Cisco come in as a contributing investor … They had also been a strategic partner to us for some time even ahead of that ...

In the last year, (Cisco) had gotten a lot more conviction and excitement around the opportunity not just to work with us, but to have us be part of them. So, yeah, they came pretty hard at us this year and very recently, and we were kind of surprised and when we came to understand what was going on, we thought it made a lot of sense.

... I think Cisco has a lot of what we ended up looking for, (including on diversity and inclusion).

Cisco is headquartered in San Jose, but they have all these offices all over the place … they're big believers, as I am, that talent is equally distributed but opportunity is not.

Crain's: Does that mean staying in Ann Arbor for the foreseeable future?

Song: Yeah, I mean, we're here and we're gonna double down. Cisco has, as much as our interest in their global footprint, they have a very significant interest in our Michigan footprint.

We've always been committed to developing success in ourselves and all the communities in which we operate ... there's going to be lots more (involvement).

Crain's: It seems people are pretty excited about some of the possible effects of the acquisition. Potential investment from Duo Security leadership in other ventures and growing the tech community financially. Could you speak to that expectation?

Song: Clearly, I think this is going to have a big impact on Ann Arbor. My hope is it has an impact more broadly, regionally.

And some of it will be direct from, literally, our capital that flows directly into this community and through our people, but just as much, it's also a bit of a mind shift, right.

You see more and more a lot more investment in (Silicon) Valley leaving the valley in search of the next best opportunities elsewhere, because there's just too much noise. ... When startups are the local industry, you end up with a lot of stuff.

I think things in the valley sometimes become very esoteric. Rich people solving for rich people's needs …

I think there's something special about solving for the needs of the vast majority of folks from the heartland of America. The best opportunity and all the resources to go and build a company, a multibillion dollar company, is here, you don't have to go somewhere else.

I do think it's meaningful to have a big milestone like this, where people can point to and say, 'Look, if Duo can do it, so can any of us.'

Crain's: There were doubts you could grow such a successful tech firm from Ann Arbor, as opposed to one of the coasts. We can talk about mentorship broadly, but what are the specific ways you expect to grow more success here?

Song: It's not about capital. Everyone says 'Oh, if only we had more venture capital in Michigan.' But that's just nonsense. That's not the limiting factor. The limiting factor here in Michigan is the support for founders and the founders supporting each other.

The founder network (has) been here for some time, but what hasn't been here as much has been the commitment from folks to pay it forward and to make sure they're helping each other in a way that is highly visible, number one, and two, can be replicated.

There are many different perspectives and models and frameworks, and that's what innovation is. Just like sexual reproduction, you know, you need the mix of DNA to produce something different and new.

That's sort of how I see a community that wants to grow and innovate and see new things happen. It has to be open to the idea that this stuff is messy. It doesn't look like anything. It looks like a skateboarder, a hacker in flip-flops (Duo co-founder Jon Oberheide) and a talking duck.

Crain's: What do you see for the connection between Ann Arbor and Detroit, and their tech scenes?

Song: Detroit is critical to the success of our state ... Regionally, obviously, Ann Arbor is doing great, right, it's the city that has sort of an economic engine of brains. It imports brains, it grows them, it sometimes sends them back and sometimes keeps them.

That's not a bad engine of growth to rely upon, but what we need regionally and for the state is progress that's equitable.

... Ann Arbor, they say it's the highest number of PhDs per capita, most educated city, all that kind of stuff. And then you have a city like Detroit where, you know, we've let it fall this far ...

So three things have to move together for there to be progress and growth in a way that accommodates all: development, public transit and affordability.

Without transit and the ability to have opportunity and talent meet each other and dollars to move, it's hard. You get locked into these locations. So my great hope here is that we approach success here in a way that's bigger than ourselves.

Crain's: And the startup community can be highly involved in that process?

Song: The startup community needs to be. Because I think the reality is that industries at scale in mature economies, they don't grow that fast. And in order to find opportunity for growth, you really have to create new paths to it.

We have a tremendous engine of intellectual capital and growth here. What I think is needed ... is a commitment to each other in this journey so we can see success in Ann Arbor help lift Detroit and vice versa. We can think ... about everything between Ann Arbor and Detroit as one big economic area. Because, you know, that distance, it's shorter than San Francisco to San Jose (around Silicon Valley).

So there's no reason for us to carve it up all this way, and I know Ann Arborites don't like to think of this still as Metro Detroit, but we're in the shadow of one of the world's greatest cities. We have nothing to be ashamed of there, right. We should be working to make sure that we become part of that story and help drive it.

—Editor's note: This story has been corrected to reflect Song's statement regarding him as a skateboarder and his co-founder as a hacker in flip-flops.