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Before getting into Opportunity Zones, Patrick McKenna, managing partner at Catalyst Opportunity Funds, had the venture fund focused on investing in entrepreneurs outside of Silicon Valley—from Baltimore to Pittsburgh to Milwaukee.

"The idea here is that there's talent everywhere," he says. "It's under-capitalized. So, I've personally been in those places working with entrepreneurs and working with local investors."

That experience helped McKenna develop an eye for cities with great potential. "I have a track record of being able to validate that there's underlying growth, there's talent and there's a bright future in these places, but they are also under-capitalized," he says.

But in many of these places, the infrastructure isn't in place. "If you're scaling a company in Columbus or Pittsburgh or a lot of these places, you've got five, 10 or 20 people and a $1 or $2 million in investment, and now you're going to [need to] raise $10 or $20 million," McKenna says. "First of all, you need investors who are in." But these fledgling companies also need Class A office space and housing for their workers. In the past, they might have moved to California or Boston or New York. McKenna thinks the Opportunity Zone program can be a springboard to encouraging these firms to grow in second-tier cities.

"The potential to me is how do we keep that company in Pittsburgh and Baltimore and Columbus," he says. "The truth is we need seed investment. We need venture capital in Series A, but then we also need office space that will accommodate that growth, and we need housing. People will move and come in from San Francisco, New York and Boston, but they need to access that housing. You need all those things coming together to address the opportunity gap, which is a big theme of my personal investing."

McKenna wants the young graduate from Carnegie Mellon, for instance, to feel like they can stay in Pittsburgh and have the same opportunity they would get in San Francisco.

"If the growth is happening around the country and not on the coasts, there's historically been a lack of investment in that growth," he says. "Now we can bring that investment in and catalyze that growth. That's going to make a big difference for the country."

McKenna cautions that the Opportunity Zone program won't create a business ecosystem in places that don't have underlying potential, but it stimulates those that do. "If that potential is bubbling and ready and it lacks capital and network, we can bring that," he says. "That's the sweet spot that is unique to the way we see the world."

Already, Catalyst launched three fund investments in Salt Lake City and Bozeman, Utah. At Industry SLC and Pickle and Hide in Salt Lake City, the firm intends to transform old industrial properties into creative office and retail. "This is a place that's sitting between two pretty successful areas, but it is being left out," McKenna says. In Bozeman, Catalyst is investing in a 60-unit workforce-attainable apartment complex. "Bozeman is growing a lot of tech jobs," McKenna says. "It also has a lot of second-home people moving there."

The population growth is squeezing the working class, according to McKenna. "Nobody is investing in that workforce housing for people who go to work every day making 60% to 120% of AMI," he says. "That's why we got behind that project in Bozeman."