Investing in the Midwest

Kauffman Fellows
7 min readMay 11, 2022


From using artificial intelligence to improve the future of work to investing in tech that supports the entire supply chain, the investment opportunities in the Midwest are plentiful. Investors operating outside of the coastal hot spots have carved out profitable regional niches, but they’ve also overcome unique challenges to build infrastructure, entice top talent, and create the support startups need to scale.

Join Maggie Kenefake (KF Class 25) for insightful conversations discussing the benefits and challenges of investing in the midwest with Mary Grove of Bread and Butter Investments and Roy Bahat of Bloomberg Beta on the Kauffman Fellows Podcast!

Catch each episode below or on iTunes, Spotify, and

This season of the Kauffman Fellows Podcast is produced in partnership with Mighty Capital. Together, we unravel what truly makes a great VC investor.

Bread and Butter Investors, Mary Grove, On Her Three Areas of Investing Focus

Kick off the second week of Maggie Kenefake's (KF Class 25) miniseries with Mary Grove, Managing Partner at Bread and Butter Investments, an early-stage venture capital firm based in Minnesota. Together they discuss the differences between investing in the Midwest vs the coasts, the perks of being the underdog, and the importance of aligning your investment thesis with your region’s strengths.

Tune in and catch some of our favorite soundbites below!

Listen to the full episode above on Spotify or over on iTunes.

On investing with the “Minnesota home-field advantage”

“Minnesota nice” doesn’t preclude innovation and opportunity, Mary said.

“Realistically, there’s just so much untapped opportunity between the coasts, and being here was about optimism. It was about hope, it was about being a bit of the underdog if you will.”

It’s ‘how do we leverage what’s in our backyard?’ We’re at the epicenter of these multi-trillion-dollar global industries of food tech, health tech, and enterprise software. And how do we build the best infrastructure to support companies to start here, to scale here, and really just take advantage of the magic between the coasts?”

On what’s different about investing in the Midwest

Access to capital, Mary said, is much more limited than on the East and West coasts. That hurdle has forced entrepreneurs to adapt.

“It creates this very scrappy mentality of, ‘constraint breeds creativity, and we are going to build with the resources that we do have.’ Another observation I have is that some of the biggest problems in our world will be solved by the people living in regions that are most affected. So we invest heavily in ag tech and food tech.”

“There is a great degree of humility here that I think is a positive attribute. But we’re also kind of punching below our weight and the resources that we really do have here. And part of my mission, what’s been exciting, is just to help create more visibility for the entrepreneurs, for the local ecosystem, for the incredible opportunity set that we’re sitting on here.”

On her company’s driving focus in food tech, health tech, and enterprise

Aligning Bread and Butter’s investing focus with regional strengths has been crucial for the strategic vision of the company.

“We believe that we are investing in the bread and butter sectors of the modern economy moving forward. We know that it’s never been a more important time to invest in these sectors. Broadly speaking, how we feed ourselves, how we care for one another, and how we work could not be more important.”

Her investing strategy focuses on the tech that supports those sectors, not necessarily the consumer good itself.

‘It’s really focused on the software and tech-enabled hardware side of the business. So we’re not investing in consumer food products, CPG products themselves. We’re investing in the tech that powers the whole supply chain. It’s the opportunity to move these gigantic global industries into the digital age and create more efficiencies.”

On what she’s learned to become a better investor

In some ways, Mary’s background at Google has stayed with her as she’s grown in her career and relocated away from Silicon Valley.

“I am really interested in the product and the tech side of our investing. And it’s really fun, creative. The work of venture is so intellectually invigorating. Every day, you’re looking at a different sector and trying to dig deep very quickly, figure out what you don’t know, ask a lot of questions so you can find out and hopefully be a great partner to some great entrepreneurs.”

On what she’s thankful for doing when she started investing

Though her company is focused on tech and investing, her work with founders requires that she prioritize people.

“I think it’s cherishing and keeping relationships as number one, and just the authenticity and sincerity of how I hope, I’ve strived to make myself very accessible to our founders and to their teams. And that’s one of the superpowers an investor can have.”

Listen to the full episode above on Spotify or over on iTunes.

Roy Bahat of Bloomberg Beta on the Future of Work

Maggie Kenefake (KF Class 25) welcomes Roy Bahat of Bloomberg Beta to share how he predicts AI will positively and negatively impact the future of work, how machine intelligence will impact routine worker positions, and how the pandemic’s dispersion of talent benefits the midwest.

Listen to the full episode above on Spotify or over on iTunes.

The single most important technology trend today

It’s no surprise that Roy considers artificial intelligence the most crucial tech trend today. AI will obviously be multifaceted in its impacts and will both advance and disrupt society.

“If you think about what computers do, the first part of what computers did was brute force calculation of things that human beings would have struggled to calculate.

The thing that AI allows is it allows two really powerful things that go together. The core thing is that it allows you to make predictions, and when computers start anticipating what the future will hold and operating on that anticipated future. Will this machine break down in a factory? How can we predict that more accurately than a human being can? Well, that’s really cool.

And then the second thing is that they stop being deterministic, and they start being probabilistic. They start allowing for the fact that there’s a chance something may happen and not happen. And so in a sense, what artificial intelligence does is really brings statistics into the realm of computing in a much more powerful way.

And I just think those two things — prediction and statistics — they allow machines to do things that were previously inaccessible to them, and enormously valuable in one industry after another.”

On how machine intelligence impacts routine worker positions

The employment outlook for low-skilled workers is not bright, as Roy predicts that a lot of that routine work will become unnecessary in the future.

“Nobody quite knows when, or in what order. I think that there’s a vulnerability there. The other thing that is happening is that there’s an unbundling of the routine. Almost every job includes both routine and non-routine aspects.

And human beings are not machines; we have feelings, we have desires. And you can’t take a person and split their work up into tasks without dehumanizing the way you think of them to some extent. And so there’s this push-pull of how do we make sure that we have people doing the work that is necessary?

On the pandemic dispersing startup expertise

The startup universe has been primarily focused on tech hubs for the last couple of decades, but the pandemic helped to disperse that expertise to other areas of the country, including the Midwest.

“How do we level up the tradecraft of the founders who are all over the country? That’s best done through close proximity and observation. The world handed the country a gift, in the sense that as much of a tragedy as COVID was, it dispersed many of the people who practice the startup tradecraft throughout the country, and this was already beginning to happen.”

On what makes a great VC

Roy noted that different companies need different VCs depending on where on the startup journey the company is, and he doesn’t see a common skill set among all VCs.

“Other than general life stuff, I don’t know that there is a common skill that makes a great VC across all the stages, because they’re so different from one another.

What makes a great VC pre-IPO and what makes a great VC at Day Zero are totally different things. We call it the same occupation, but it’s not. A great VC at the earliest stages, I think, is like an A&R person in the music industry. They’ve got taste; they’ve got an approach for where they focus. And then they work like a maniac to help the startups that they back.”

At the later stages, you’re looking at DCF, and multiples and market size, and what the likely perception on the street is going to be and company building trends and that kind of stuff.”

Listen to the full episode above on Spotify or over on iTunes.



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