Victor Gutwein is the founder and managing director of M25, a venture capital firm based out of Chicago, Illinois. M25's goal is to grow technology companies by investing in early-stage startups across the midwest. Apart from founding a successful firm, Victor is also an experienced and knowledgable angel investor. We asked him some questions to learn more of his thoughts on investing in the midwest:
1) How would you describe M25’s focus and why have you chosen to target the Midwest?
M25 invests in early-stage tech companies headquartered across the Midwest region - basically from Kansas City to Minneapolis to Pittsburgh. In just over 3 years, we've invested in 76 startups in 24 cities across 11 states - including 4 in Nebraska. We are pretty general on the tech side - our Nebraska portfolio includes marketing SaaS (opendorse and FourStarzz), fintech and digital health (LeverageRx) and B2C ecommerce (Faithbox).
We've invested deeply in the Midwest for both strategic and practical reasons. I highlight most of them in this blogpost, but overall this region is an incredibly large, vibrant and diverse economy with an increasing percentage of all US VC deals but a miniscule amount of the capital. Additionally, in order to effectively make early (<$1M ARR startups raising $500K-$3M) venture investments, you need to be more "local" and tied in to the community - and you have to be close enough to make the plane flights and travel time cost-effective.
2) What in particular has impressed you about Nebraska's entrepreneurial ecosystem?
Locally, the environment is very close-knit. Founders, investors, service providers and community leaders all know each other and help each other. Now that I've gotten involved, it feels like I am one-degree away from every entrepreneur in the state. This is invaluable for me as I source deals, do due diligence and collaborate with others.
3) What technology trends excite you the most?
Big, slow-moving industries and processes quickly adopting very mature tech (like cloud-computing and smartphones). I'm still impressed by how much opportunity I'm seeing with seemingly obvious and simple applications in industries like healthcare, transportation, finance and real estate.
Additionally, we are just at the tip of the iceberg for the ways sensors / IoT will be embedded into our everyday lives. We'll be continually shocked at the ways Google Home / Amazon Alexa find ways to be always around us.
4) What makes a startup company stand out to you?
Lean, rapid growth in key metrics (revenue, MAUs, pilots, customers, etc.). I am an expert in very few things, and I definitely don't know if a startup's product is great or not. But what I can look at are the customer signals, even if early.
5) What is some advice you have for first time angel investors?
Do a lot of deals ;) While you may get lucky on one of your first ones, the odds are your deal flow and ability to assess startups will only improve. Additionally, even the best VCs pick more losers than winners, so you need to ensure a large enough portfolio to capture winners in this power-law asset class. Don't know what I'm talking about? Check out this book by the well-respected angel investing guru, David Rose.