July 5, 2016
M25 Group, a Chicago-based seed-stage micro-VC firm, has raised $10M from roughly 30 limited partners for their newest fund. Headquartered in the Midwest, the VC firm has big plans to disrupt the current VC landscape in Chicago and beyond. M25 sources its investments through several strategic relationships with Midwest universities, for example the firm partnered with The Purdue Foundry, an entrepreneurship and commercialization hub within the university.
Started back in 2015 by Victor Gutwein, he was later joined by director Mike Asem in the second fund, in order to “further expand the group’s unique strategy and approach to an industry that is saturated with risk”. According to a press release surrounding the announcement, “M25 focuses on reducing the inherent risk associated with early-stage startup investments by investing the same amount across a wide variety of companies. The result embodies something resembling an “index fund” of Midwest startups, carrying a nearly negligible risk of a negative return. Specifically in M25’s highly-sophisticated model, the likelihood of a negative return on the portfolio drops below 1 percent. Approximately twenty investments will be made each year for a three-year span by Gutwein and Asem through this second fund”.
Asem and Gutwein’s goals are even more exciting considering that both investors are still in their twenties. Still, their excitement and optimism with disrupting the current VC landscape for the Midwest is contagious, and speaks to the shifting business landscape that they operate in.
Jennifer Brandel, Co-founder and CEO of Hearken, one of M25 Group’s current portfolio companies, said “M25 Group has been an incredibly supportive partner. Victor is extremely proactive, responsive and asks great questions. He’s introduced us to so many great people in his network and is eager to help. We feel lucky to have such a grounded group of investors on a mission to support the good work and innovation born from the Midwest.”
The work that is to come from M25 Group and other innovators in the Chicago VC and business industry will have a significant influence as the industry continues to grow for that area. And as Asem says, “With the contributions of our advisors’ expertise and insight, we’ll be better equipped to be actionable and effective, as well as able to provide value to our portfolio companies beyond pure capital.”
Image via Mariano Mantel / Flickr
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