Building Inclusive VC Pipelines & Processes

Kauffman Fellows
3 min readFeb 25, 2022


M25’s 2022 Diversity Report serves as a best-in-class example for the entire VC industry to follow

Upon joining Kauffman Fellows, M25’s partners Mike Asem (Class 24) and Victor Gutwein (Class 22) stood with other investors in the industry and took Kauffman Fellows’ Stewardship Pledge for the Innovation Investor. In the wake of more recent events and societal discourse around racism, injustice, and oppression of underrepresented individuals, the Midwest-based VC firm has spent even more time “looking inwardly at what we’ve done, and what is yet still ours to own,” says Asem. He quickly got to work publishing the Diversity, Inclusion, and Anti-Racism Framework for VC, followed by this week’s release of M25’s first-ever Diversity Report. Both serve as best-in-class examples for the industry at large to follow.

M25’s Diversity Report is a culmination of the data collection the firm started in October 2020, displaying the percentages across demographics (race and gender) of the founders they’ve spoken with since then, founders they’ve invested in over the last 5+ years, and the distribution of their funds that went to underrepresented founders.

“As a firm, we believe that transparency is a key component of addressing gaps in funding for underrepresented founders. For us, this isn’t a victory lap or a pat on the back for our efforts. Rather, it is a first glimpse into how we’re doing as a firm to increase deal flow and ensure we see ALL founders — particularly those that are overlooked — raising capital,” says Gutwein.

Of note in the report: nearly half of the portfolio companies M25’s current fund are helmed by underrepresented founders. In addition, the percentage of our intro calls with founders who identify as women beat industry averages for VC funding to women, and the number of calls with founders who identify as Black outpaces the demographic statistics of the Midwest, where M25 invests. In addition, nearly half of the firm’s deployed capital (initial, follow-on, and SPVs) has gone to underrepresented founders.

“Our hope is that by publishing our report about our process and KPIs around DEI, other firms will be encouraged to take their own next step, and perhaps to do the same,” says Asem. “Racism did not die in 2020, but I still believe that all of us can play our own authentic roles in bringing it to a true demise.”

M25 is an early-stage venture firm based in Chicago, investing solely in tech startups headquartered in the Midwest. Since launching in 2015, they’ve become the most active investor in the region. Led by Mike Asem and Victor Gutwein, M25 enjoys challenging traditions. As a firm, they committed in 2020 to embrace transparency in their pipeline and processes as they relate to diversity and inclusion. The diversity benchmark report is part of that commitment, highlighting data on underrepresented founders in the Midwest.

Check out the full report here.

The M25 team in August 2021, downtown Chicago



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