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M25 Group, an early-stage venture capital firm that’s led by two Chicagoans still in their twenties, has just announced a $10M second fund.
The firm, which invests exclusively in startups that are headquartered in the Midwest, was founded in 2015 by Victor Gutwein, a member of Hyde Park Angels (HPA), the region’s most active angel group, and a board member with the University of Chicago’s first student-run venture fund. Joining Gutwein as a director is Mike Asem, a founder of Purdue-based The Anvil, the country’s largest student-run co-working space and incubator.
M25, which aims to make twenty investments a year for the next three years, currently counts 18 startups in its portfolio, including Chicago companies Luna Lights, ConceptDrop, Page Vault, The Eastmann Egg Company, and Hearken. According to the firm, M25 invests the same amount of capital across a wide variety of industries in an effort to create “something resembling an ‘index fund’ of Midwest startups.” The firm, which raised its $10M fund from roughly 30 limited partners, says that, as a result of its “highly-sophisticated model, the likelihood of a negative return on the portfolio drops below 1%.”
Added Jennifer Brandel, Co-founder and CEO of Hearken, “M25 Group has been an incredibly supportive partner; 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.”
In addition to co-investing with larger venture firms, such as HPA, M25 sources its investments through several strategic relationships with Midwest universities. In May, the firm partnered with The Purdue Foundry, an entrepreneurship and commercialization hub within the university, to identify “new and emerging ventures and collaboratively work to advance the startups through funding, mentoring and networking,” said Gutwein.
Explained Pete Wilkins, Managing Director of Hyde Park Angels, “At HPA, Victor has been instrumental in sharing his unique insights on portfolio theory and shaping a model that our members are actively applying to their investments. His leadership in this initiative showcases his data-driven, strategic approach as an investor and adds tremendous value to our organization.”