Mary Grove of Bread & Butter Ventures // from Google and Rise of the Rest to Minneapolis [CC063]

Jay Clouse 0:02
I’m here with Casey Allen, the founder of the Enterprise Rising conference. Casey, what is your favorite part about Enterprise Rising?

Casey Allen 0:09
Here’s what I love, Jay. I love it when founders get up on stage and really open up and be really candid and super honest about not just their startup, but about life. When Ben Milne, founder of Dwolla Des Moines talks about how he doesn’t work a zillion hours a week anymore, and how he balances his marriage and his kids. Or when David Karandish is the founder and CEO of Jane.ai out of St. Louis talks about how he turns his phone off one day a week and how he balances all this travel. Or when Rob Walling from founder and CEO of Drip, which he sold, gets up on stage and talks about all the stresses and anxieties and how he didn’t destroy his marriage, even though it might have came close several times. That’s the stuff founders really want to hear. And that’s the stuff they don’t get anywhere. And I really, really love hearing founders talking about that stuff.

Jay Clouse 0:55
How is Enterprise Rising different this year?

Casey Allen 0:58
If you’ve ever attended online event, you know, networking sucks, slack and discord really just don’t cut it. So we have custom built for Enterprise Rising 2020, an online platform that’s like startup masterclass, meets the Sims, where every attendee has an avatar, you’re in a building, you’re sitting in chairs, you’re sitting in couches, you’re having real video chats with the people next to you. So what we’ve done is we’ve recreated an actual virtual environment where networking happens, just like it does in real life.

Jay Clouse 1:23
Casey, when is Enterprise Rising? And how can people get involved?

Casey Allen 1:27
enterprise rising is the end of October, the 20th and 21st is two full days is all online. So you can dip in and out for as much or as little as you want. Go to enterpriserising.co at the enterpriserising.co and you can use discount code Upside to score 20% off as many tickets as you want. So discount code Upside at Enterpriserising.co. All the details are there the entire conference is online, it’s gonna be a great time.

Mary Grove 1:55
I mean, I I lived in Menlo Park, right close to Sand Hill Road. I’ve been in Silicon Valley for almost 20 years. That would be a more logical thing, but I loved the non traditional approach. And I truly believe that that is the right way. We’re going to achieve significant financial return through that strategy. It’s not just because I think you know, this is a good thing to do for the world.

Jay Clouse 2:17
The startup investment landscape is changing. and world class companies are being built outside of Silicon Valley. We find them talk with them and discuss the upside of investing in them. Welcom to Upside.

Hello, hello, hello, and welcome to the Upside podcast, the first podcast finding outside outside of Silicon Valley. I’m Jay Clouse, and I’m accompanied by my co host, Mr. New Peloton owner himself Eric Hornung,

Eric Hornung 2:58
I am fit and I, well not yet I mean, mentally.

Jay Clouse 3:03
That’s what makes you fit. You just need to have the equipment.

Eric Hornung 3:06
All I do is I turn around halfway through my workday. I look at it. Boom. Two, two pack abs.

Jay Clouse 3:12
Two pack.

Eric Hornung 3:14
Well, yeah, you actually got to do the work to get to the six pack, you know.

Jay Clouse 3:17
What about the APAC?

Eric Hornung 3:19
Some things in this life are just unattainable, Jay. You know, I like wine, and beer, and carbs. APAC just, it might not be for me.

Jay Clouse 3:28
See I look at the price tag on a Peloton and to me that’s unattainable as well. But you’re you’re proving me different.

Eric Hornung 3:34
I look at the price tag on an eight pack and say that’s unattainable. So you know, I’m mentally fit though. That’s for sure. As we’re sitting here today, we are three days into owning the Peloton and I am on a three day streak. So the honeymoon period is is off to a good start.

Jay Clouse 3:51
What is one of the Peloton workout actually look like? What is your streak look like?

Eric Hornung 3:55
Well, I started with just with 20 minute classes, because that’s what they say to do. They say follow our instructions and learn what’s going on. I’ve only been to like two or three cycling classes before I used to actually bike but like, you know, I’ll just try it out. I’ll follow the script, I’ll let them know. I’ll do what they say to do. So that’s what I’m doing. But eventually, it’ll get up to 40 to 60 minute classes every day. And there’s also like strength and yoga and all this stuff that I haven’t really dove into yet, but I’ve just been hitting the bike.

Jay Clouse 4:24
Are these classes live? Are they pre recorded.

Eric Hornung 4:26
They have both when you start off the kind of way they say I go through this is kind of some of their best beginner classes that are like, here’s how you do this part. Here’s what you do here. Focus on your posture, do all these things that maybe if you were taking more advanced class, you wouldn’t really think about like, in the last one I did, they reminded me like shoulders and back posture like five times in the course of 20 minutes. And every time I was like, Oh yeah, I’m doing that wrong, again. So it’s just like you have to remember and actually do it and then if I was just like jumping in like a badass into like a 60 minute hard class, I definitely would have just terrible posture and just be grunting through it.

Jay Clouse 5:06
Fitness is important fitness makes you live this one life that you have. And the best way that you can.

Eric Hornung 5:13
Right and it should not just your physical body Jay, it could be financial fitness.

Jay Clouse 5:18
Which is something that our friends at Ethos Wealth Management can really help you with. Our friends over at Ethos want to help you live the best financial life you can in this one life that you have to live. And if you want to learn more, you can go to upside.FM/ethos.

Eric Hornung 5:33
You know what an Ethos is that I really like Jay, this whole middle of the country Ethos that we’ve been picking up here on Upside.

Jay Clouse 5:40
That has been a little bit of the bread and butter of our show?

Eric Hornung 5:44
Oh, absolutely. I mean, it’s in the title. It’s, it’s everywhere. And today’s guest really represents that because she is coming from the poster child for investing in the middle of the country.

Jay Clouse 5:57
Today we are talking with Mary Grove, the managing partner of the new Bread and Butter Ventures. After her 15 year career at Google, Mary worked as an investment partner at revolutions Rise of the Rest Seed Fund, where she led dozens of investments in a range of sectors including healthcare enterprise software in fin tech, she also built the funds portfolio support platform, and built a network of over 150 mentors and partners to guide startup growth.

Eric Hornung 6:27
Let me ask you a question. Jay. You may get to the NFL, you’re playing for the Packers, right? Like, do you leave and go start your own football team in a different league?

Jay Clouse 6:36
I don’t think any players leave the team and start throwing football team.

Eric Hornung 6:40
Exactly. Why would you leave the Rise of the Rest Seed Fund and go start your own team. That’s what I’m saying. She made it she middle of the country investing. If you believe in that thesis, she’s there. I’m excited to talk about starting your own thing.

Jay Clouse 6:52
And that’s exactly what we’re gonna talk about here today. Bread and Butter ventures is an early stage venture capital firm based in Minnesota, which is called Eric,The Bread and Butter state.

Eric Hornung 7:02
Did you know that?

Jay Clouse 7:03
No, I did not. Never heard that.

Eric Hornung 7:05
No me either. But I also love bread and butter pickles. So if that’s what’s referring to into it.

Jay Clouse 7:10
It’s probably not. They invest globally while leveraging their state and region’s unparalleled access to strong corporate connections, commercial opportunities in industry expertise for the benefits of their founders. One more fact, Eric, they’re looking at the sectors of Ag and food tech, health tech, enterprise SAS. They believe that Minnesota can lead the way in creating and supporting companies globally, who will be the bread and butter of the modern economy. Good talking points for a firm started just in June of 2020.

You really don’t think it’s bread and butter pickles huh..

I don’t think so. I mean, when you think of pickles, do you think of Minnesota.

Eric Hornung 7:47
Now I do.

Jay Clouse 7:48
We’d love to hear what you think of when you think of bread and butter. Dear listener, you can tweet at us @upsideFM or email us hello@upside.fm and we’ll get to the conversation with Mary right after this.

Eric Hornung 8:01
Let’s bring in Kevin Kinross, a partner at Taft Stettinius and Hollister to teach us about forming a company. Taft is a full service law firm known for assisting entrepreneurs across the Heartland. As a reminder, the following remarks by Taft attorneys are for informational purposes only and are not legal advice. This information is not intended to create and receipt of it does not constitute an attorney client relationship. No person or organization should act upon this information without first seeking professional counsel. Kevin, how’s it going? Thanks for coming on. How’s your day going?

Kevin Kinross 8:30
It’s going great. Thanks for having me on. It’s fun to take a little break from the norms participate on your show.

Jay Clouse 8:35
I can’t imagine a better lunch break than recording some of this. Kevin, we’ve heard that in the world of startups, you should either incorporate in Delaware or your home state is Delaware really where I need to incorporate and have a founder once her company to be a Delaware company? Does she physically have to be present there to reap the benefit,

Kevin Kinross 8:53
What your initial state of incorporation is can be changed. And as you look to where you should form your corporation, a number of factors come in including what your future growth plans look like and what your future need for additional capital may be with either your initial funding or your series A round the investors with who are providing that funding could require you to re domesticate your company to Delaware. So in some eyes, it doesn’t make sense to start off in Delaware. But it doesn’t necessarily mean you need to do that. Just recognizing and assuming that when that next round of funding comes in, you very likely may have to re domesticate. And this also applies to if you’re a LLC or talking about C Corporation. The reason why individuals really do push towards Delaware is primarily three. The first one is well established Chancery court, the Delaware court system provides a jury free court system, at least for a complex business matters that come in at the Chancery court level with judges are well versed on these matters. The second one is the flexibility that it provides for your composition of your board of directors. And finally, a lot of the investors we’re dealing with already have their investment documents that they’re gonna be providing to you drafted under Delaware law and they’re gonna want to know reinvent the wheel just for your financing. Regardless of whether you’re in Delaware, Ohio or some other state, you’re not required to have a physical presence there. Unless you’re a regulated entity that may required under those statutes. You’re not required to have a physical presence, you are required to have a statutory agent. And just to kind of tie it up in a bow from my very first sense, these are things that can be changed.

Eric Hornung 10:19
Awesome. And if people want to learn more about Taft or yourself, where should they go?

Kevin Kinross 10:23
Taftlaw.com.

Mary Grove 10:30
First of all, thank you for having me, I’m a big fan of the show, and really appreciate the efforts that you that you put for us to really shine a spotlight on, you know, cities and places that are often underlooked. So thank you. So a brief bit about me. So I really have been working in, in tech and early stage investing for all my career. But I’d say my first lens of entrepreneurship really dates back to my family. And so my parents are immigrants from Thailand who grew up, you know, in villages and rural villages without electricity. And to me really personified that quintessential American dream. So they immigrated here met here, raise three children together. And they started and ran small businesses together for over 30 years. And having that opportunity to see the grit and hustle and tenacity in the failure and success. And all of it from an early stage really gave me such a foundation of respect and, and admiration. From there, I went to college at Stanford for both undergrad and grad school. And because of that, you know, ended up in the backyard of tech. And so I started my career at Google in 2004. I worked on the IPO deal team, the year the company went public. And it was an amazing experience that really made me fall in love with the company, its mission, what was happening on the product and business side. So then I spent the next six years in a team called New Business Development, which was doing sort of early stage product, incubation and partnerships to a lot of work in very emerging markets, and some of the least connected countries in the world from an access perspective. And through that came this thread that now one of the ways to drive economic growth and development is through supporting entrepreneurship. And it was through the supporting accelerators, the students, the universities, the early stage startups at the time, and this was, you know, early 2009, 2010. So at that point, I moved back to the Google headquarters, and I had the great opportunity of starting the team that is now Google for startups, which is the company’s umbrella for supporting startup efforts, you know, both at the company level startup level, but also at the startup ecosystem level, which is critically important. And so our team was proud to be doing work in over 130 countries, the team is going strong and exists today, Google for startups, we still work together a bunch. And that really gave me my it’s cemented my love for working with entrepreneurs at the early stage, and also my fascination that it’s not just about Silicon Valley, even though I lived and loved working there. So we took a sharp right turn in life, both personally and professionally in 2018, my family and I moved to Minneapolis, which is where I now call home. And that was a, it was a motivation. It this belief that the future the innovation economy won’t be necessarily written in, in Silicon Valley in New York anymore. It’s it’s what’s happening in the middle of the country. And so my husband is a very proud Minnesota native, we’ve huge family footprint in the Midwest. And so we were also intrigued by the idea of being a part of a building, and building things here and also raising our family here. So we had twins, we have boy girl twins who are wanting at the time, they’re now three and a half. And so it’s just a blast. It’s been a really transformative last few years for me on every level. You know, at that time, I started investing, venture investing. So I joined Steve Case’s farm revolution, as a partner on the Rise the Rest Seed Fund in 2018, and had a really great experience exploring and getting to know, you know, the rest of our country through the lens of entrepreneurs. And so that was a fantastic chapter again, convinced me that I loved early stage and had the opportunity to invest across a number of verticals, in particular health tech, enterprise software, marketplaces, fin tech, future of work are some of the big themes that I worked on there. And so that is actually what brought me to Minnesota. And I’m happy to talk more about you know, where we are now.

Jay Clouse 14:21
For sure, and I’m sure we’ll get there soon. But I have to ask one question, because and looking at your background and your time at Google for startups between 2012 and 2016 or so I was really involved with Startup Weekend and Google for Entrepreneurs was huge supporter huge help making that all possible. And I think, you know, as you’re saying, These Startup Weekend events are happening all over the country all over the world. And then, you know, predated a lot of the work that the Rise the Rest team is doing. So I’m curious to see from your vantage point within Google supporting an organization like Startup Weekend. What did you see in terms of the beginning of this trend of entrepreneurship globally, that maybe you were able to see from that vantage point before other people did.

Mary Grove 15:07
Well, I’m so happy to hear you were involved with Startup Weekend that was a very special chapter at startup weekend was actually the very first partnership that Google for Entrepreneurs, which is now called Google for Startups that we ever signed, as soon as we created the team, and it was we just loved the model, the scalability, the community involvement, the education. But I would say, I was incredibly fortunate, you know, Google was very unique within the corporate space within the tech space of how anytime a big corporation does something to support the entrepreneurial ecosystem, that’s a win. But Google specifically had a really unique approach where we were willing to deploy, you know, we deployed over 100 million dollars of budget over the course of those years into the community. And it’s not tied to P&L. It’s not tied to product distribution or revenue. It’s not specifically tied to sales. It really is this belief, that long term, if we invest at the ecosystem level that leads to more companies being created more companies coming online, companies then using the internet using Google products, there’s a long term play that’s good for business, also net positive for the economy in the world. And so, you know, we were very fortunate to be able to do that. But early on our strategy, we knew it had to be twofold meaning there’s direct work that Google will do in market and with startups. And one of the biggest programs to highlight there was our campus program, which we have seven campuses across the world, they’re actually all outside of the US, which are these free, beautiful, convening spaces, we call them open source containers for the community where we would house you know, accelerators, co working spaces, a cafe, accelerator programs, targeting specific underrepresented groups, to all bring them in offer that infrastructure for free. And that was, you know, but we knew that even with the resources of Google that is but a drop in the bucket of the need and the opportunity. So the way that we would get to scale is to back amazing organizations. And so what’s still a model today, right, Google, or startups backs, several dozen leading organizations around the world and Startup Weekend happened to be the perfect pilot for that, because at the time we partnered, Startup Weekend was in about 25 cities. And they were doing incredible work, they needed a financial boost and a tech partner to help them get to 100 countries. And that happened in that time, right. And I never still extremely close with so many other people who were involved. And you know, Mark Nager, would an amazing visionary leader and person, the team there, but also a lot of the chapter organizers and leaders were so good colleagues and good friends, I think that just speaks to that, you know, we’re building we’re part of building a global community of ecosystem leaders. And a model is almost b2b. Because if you can empower the enablers, the exponential impact you can have is just so tremendous. And so I think for us, it was also the recognition that we’ve spent time on the ground in, in Palestine and Afghanistan, across Sub Saharan Africa in India, we know we’ve seen firsthand that entrepreneurship is really thriving in all corners of the globe. And we’re so we would be so remiss to think that it’s it’s about a 50 mile radius from Silicon Valley that we can drive to and and that’s the only place that we can bring innovation and so, so yes, it’s been it’s been a really fun journey to watch that, that landscape evolve. And I think, you know, it’s more true than ever today. And we’re seeing that literally today in the environment of COVID-19. Right up, do you? Do you need to live in Silicon Valley to build a great company or even to work for one of the greatest tech companies in the world, some of the greatest ones that are headquartered there? And I just, I don’t know that the answer is yes.

Eric Hornung 18:43
I want to take us a little bit off that tangent for a second. You mentioned that you were on the Google IPO deal team, internally, famously an unorthodox Dutch auction style IPO. And today, we’re sitting here kind of in the middle of Bill Gurley fighting for direct listings versus the traditional IPO. I would love to hear kind of your take on the decision to do a Dutch auction style IPO at Google. And then how that compares to direct listings and traditional IPOs. And I know Jay’s gonna ask this question already. So I’ll just preface it for our listeners who aren’t maybe versed in this if you just kind of give it at a high level as well.

Mary Grove 19:27
Sure. I mean, there’s a lot of different and I think it’s very interesting to look back at that was, what 15 years ago, What year are we in now? Yeah, that was that was 16 years ago. And there was this massive sort of cluster of exciting tech IPOs. Right, which which gave create a lot of wealth very quickly. And they have a lot of people to reinvest back into the market, but also reinvest into startups and reinvest that they themselves go out and create the next generation of startups. And so I’ll preface by saying that tech IPOs are so fundamentally important and important part of this, this flywheel that enables entrepreneurship that also encourages entrepreneurs to take the leap. So I’m sitting here in Minnesota, and we just had a company here. Jamf software is one of our great success stories as well just went public, you know, a few weeks ago, here, and it was very exciting for me to reflect upon what that means. What that means overall, like, it’s great to see another great tech IPO. But specifically in a market like ours, to have that happen here is going to create this this level of inspiration, but also liquidity to create that next generation. So that’s really exciting. So when Google went public, we took a different model, as you say, which was the notion of the Dutch auction model, pioneered by the Berkshire Hathaway, the idea is that the reason behind it was that we wanted to democratize access, right? Just as our mission is to democratize access to information, also democratize access to who has the opportunity to buy into an offering like this. And so the idea was that the elementary school teacher or third grade teacher who maybe could buy, but a handful of shares could have the same opportunity, and timing and pricing as your New York investment bank. So just from day one, it really has always spoken to Google’s fundamental values of our founders, you know, Larry Page and Sergey Brin. I think for a while after that, we just saw this sort of lack of IPOs for some time, which was not very inspirational as I look at markets outside the US. And you know, I’ve spent a lot of time in a lot of European markets. The question there is, how do we create that path to M&A doesn’t necessarily have to be going public, but it can be large corporations in the ecosystem acquiring from from their market. So those companies that talent can cycle and remain there. I’ll give you a great example, of someone I really admire, which is, you know, Scott Dorsey in Indianapolis, was the founder of exacttarget. Right ExactTarget was acquired by Salesforce for $2 billion. And the team actually remained that they all remained in Indianapolis, they didn’t move to Silicon Valley. And that created this next crop of amazing entrepreneurs, I’d say, most of the a lot of startups that I meet today are people who were at ExactTarget, right, who, who were on the engineering team or on the sales team. Now they’re building that next generation. So as I think about IPOs, today, it’s been a really, gosh, what a fascinating time to have so much on the horizon, and then the year we’ve had in 2020. But I don’t think there’s one right or wrong answer. I think it’s really, it’s also just a question of timing and circumstance.

Eric Hornung 22:29
If, when Bread and Butter Ventures has their first company that IPOs

Mary Grove 22:35
Thank you for the win. And if, yes,

Eric Hornung 22:36
Like that? Are you going to be recommending a direct listing a Dutch auction or a traditional IPO?

Mary Grove 22:43
Honestly, I think it will depend on the company that the company the profile the sector, is it a consumer facing name brand? Or not? There’s a lot of factors to consider there. So honestly, I’m not trying to evade the question, but I do think it is so is so sector and circumstantial specific.

Jay Clouse 22:59
Okay, well, I’m gonna keep going down the history of tangent, while Eric thinks it is next in the weeds. Nerd question. So you were at Google for Entrepreneurs, you you helped build this, you were seeing opportunity across the country, and then you had the opportunity to join revolution? Can you help us be in the room or the conversations where you’re seeing that as Okay, this is my next move, because they’re talking about this. And that’s unique. I just love to hear, you know, obviously, you had a unique vantage point before that opportunity existed. So what really connected for you, when you said, Alright, this is my next my next chapter?

Mary Grove 23:31
Yes, it was, it was definitely a very organic evolution. So through my work with Google for Entrepreneurs, if Steve Case was one of our first and, you know, closest supporters from the early days, and also one of the loudest early advocates for this notion for what is Rise of the Rest, right, which is this notion that we should be actively investing in pouring more resources outside of the coast, because that is, that’s where the future lies. And so, Steve, and I had partnered on a variety of things primarily around that. So he was the chair of the board of global right one, which was the evolution of startup weekend, which is how we first met. But we partnered on a great series called Google Demo Day, which we ran for about five years on my team at Google. And the notion there was we sourced startups for all of our partners around the US, specifically outside of of the Bay Area. And then we would source about a dozen top companies, we’d fly them out to Mountain View, we’d pack a room at Google, full of 300 investors from Silicon Valley from, you know, big name firms to smaller boutique shops, to sector specific ones to corporate VCs, and they would watch these companies pitch. And we always every year, it was just such a such an exciting thing to see that the expectation level was so low among the investors of crucis, who’s this startup from Durham or Nashville or Minneapolis. And then because we would you know, obsessively survey and measure and get the feedback. And so we had literally, I forget how many millions The dollars that we measured over time invested as a direct result of the introductions made at Demo Day. Not only that, but Steve Case started investing in many of our companies, many of those companies then became Rise the Rest portfolio companies later when the fund was created. So for me, it was that first moment of, Okay, I think, if we organize, there clearly is appetite if we could just organize and make the connections. And so the team at revolution, it has been around since 2005. But in 20, late 2017, Steven, the team launched the first rise, the rest Seed Fund, which is 100 $50 million fund, focused on investing specifically outside of the valley, New York and Boston. And so that’s when, you know, conversations evolved. And I thought this, this would be a tremendous way to go directly into the VC space in a very different way than might be logical. I mean, I, I lived in Menlo Park, right, close to Sandhill. Road, I’ve been in Silicon Valley for almost 20 years, that would be the more logical thing, but I loved the non traditional approach. And I truly believe that that is the right way, we’re going to achieve significant financial return through that strategy. It’s not just because I think, you know, this is a good thing to do for the world. And so you know, with that, we thought about my family, and I thought about making the geographic shift, because which was also not a natural decision revolutions based in Washington, DC, not Minneapolis, but I thought, you know, if we’re going to invest the middle of the country, could be really powerful to be based here. And it works for my, my family. So, but yeah, we gave it a go. And it was definitely an adjustment for a kid who grew up in San Diego, don’t ask me about my first winter, Minnesota. But I have come to really fall in love with the place around me that community the opportunity, both one is here already. And I think more importantly, the potential that I that I and my partners at bread and butter very clearly see sitting right in front of us. And so now with bread and butter, you know, it’s really my belief that we can build a world class tier one venture firm from right here in Minnesota, leveraging the unique assets and infrastructure that are unique to our home field advantage. And many people do not know about them outside of our state. And it’s, it’s something that I think we should celebrate, and, and capitalize, I also think it’s a very smart investment strategy. So that’s now the the full focus

Eric Hornung 27:23
Help me understand that decision a little bit, you’re mentioned that you believe in the future of the middle of the country, you go join Rise of the Rest Seed Fund, which is the poster child like it is the place that you go, when you believe that thesis, right? Like it, it’s the slogan that everyone says Rise of the Rest. Why go start your own thing?

Mary Grove 27:44
Well, I felt really grateful for the opportunity to be part of that platform in that vision. And you know, it was such a broad, it is such a broad platform. So we had active investments and you know, 70 cities, 33 states, but I also felt like being on the ground here in Minnesota, it was a life experiment, right? It was, it was truly pilot, we’re gonna try it for a couple years, evaluate and see where we go. And I think in that timeframe, I became convinced that if I if I long for this, and I’m long for this place, and I believe in it, then I really want to be investing from and in the community that I’m a part of, and versus you know, and we still today, even I invest nationally, right and can invest globally. But it’s about building that, that place based strategy that is so deeply powerful. And we have really just decided to go all in on Minnesota, my husband is also was a longtime Googler as well, he was at YouTube and Google for 12 years moved here in his role at Google. But last year, he took a new role in our in our governor governor Walz his administration. So he runs economic development employment for the state of Minnesota. And for me, that’s been another incredibly fascinating and humbling way to learn to come up to speed quickly on our state, and everything that is, you know, it’s also just such a such a time to be living in Minnesota, when you look at conversation nationally around racial equity, equality, the achievement gap, I really believe that this is the place that where I want to be and so, but I would say, you know, part of the rise of the rest, they’re so complimentary in the sense that that strategy, I believe, requires hundreds, hundreds more firms to be started the middle of the country to be doing 10s of thousands of more deals, right. And so there is no one, you know, one single place I think it is, it’s just very much a part of feet on the ground with a different strategy. And so that’s part of that decision, but it’s also it’s super entrepreneurial, and it’s really fun. It’s it’s we’ve we’ve just been having an incredible, incredible time getting this off the ground and just leaning into this Minnesota strategy.

Jay Clouse 29:55
We’ve had a few folks on the show now, who seems like simulated about At the same time, they’re like, nope, we’re going, we’re going east towards the Midwest. And we’re going to invest in the middle of the country. And a lot of them will say I based here because it made the most geographic sense for reach, like we got drive in Columbus, and this is the spot. And then we’ve got Greg Robinson at 4490 in Madison, and we’ve got we’ll price that next frontier in Montana, and, and Victor gutwein, in Chicago. So it seems like everybody is feeling like to invest in the middle of the country and have our broadest reach, we’re going to take the geographic spot, we think that makes makes the most sense. But people have come to different conclusions. So obviously, you said you had family and in Minneapolis, but I imagine you had to have looked at some of these other states, too. And I’m curious to know, if there are any other factors that ultimately said, Minneapolis is where we’re putting our flag?

Mary Grove 30:51
Yes, there’s so there’s so much that? I don’t know. It’s kind of an outsider Insider. It’s very interesting, right? What are people’s perceptions of Minnesota? Is it the North? Is it the Midwest? You know, what is it? And what I have come to know is this is a very unique economy for a state to have, right? We are truly exceptional and a few sectors that I consider the backbone sectors of the modern economy. And specifically, I think we’re unparalleled in food and ag tech in health tech, and an enterprise software. So from an enterprise perspective, you know, Minnesota is home to the largest number of Fortune 500 per capita in the country at 16, fortune 500. We have 57 companies here in Minnesota who are doing more than a billion dollars in revenue. So we have we have a very diverse economy, whereas other places that I’ve lived, most recently, the Bay Area, you know, it’s primarily about one industry, it’s about tech. Here, it’s about a little bit of everything, and you have everything from, you know, the health care to the large, the FinTech, the banks to food companies, the five largest food companies in the world are headquartered in Minnesota. Cargill is the second largest private company in the world, the largest in the United States. 20%, of global food supply chain flows through Cargill, the largest company no one’s ever heard of, right. So we have so much infrastructure here that really makes us unique from an economic perspective. We also have a really strong University layer that produces talent that is constantly, you know, this this flywheel of talent of all types, not just technical, although it’s you know, it’s always a challenge, I think, to you got some of your corporates, competing with startups for the same talent. But that’s a good problem to have overall, I think, you know, from that perspective, there’s a lot going on. And the other big piece of it is because you have such a large base of Fortune 500 companies, we also have a huge philanthropic community. So Minnesota is home to one of the most charitable and philanthropic communities in the nation. So whether it’s formal foundations that are based here, nonprofits who are based here, there’s a lot of civic engagement that happens here. And then when I didn’t know until I got here, and I was, I was thrilled to see is there’s also a vibrant culture and arts and food scene here, as somebody who loves to loves to eat and loves to cook. You know, getting into that we have I learned we have the highest number of theater seats per capita outside of New York City. So you might be surprised by Minnesota has a little bit of everything. And then as a, you know, as a parent of young toddlers, I’m so excited by the opportunity to live in the city. But I am literally within walking distance of four parks, to libraries, just the amount of thoughtfulness around the preservation of nature, or the land of 10,000 Lakes. As you can tell, I’ve quickly become becoming the poster child for for Minnesota. But not only that, from a travel perspective, we are quite Central. We’re also one of the big hubs for Delta Airlines, you have a direct flight to most cities, and people are always envious of me when I was a back in the days that we were flying, but I literally could get a direct flight to, you know, Missoula, Montana and places where Tulsa, Oklahoma, or colleagues were having to do double layovers from you know, from the coasts. And so, yeah, we’ve got more going on than that people know. So I, I recommend it.

Eric Hornung 34:08
Here, LPs for bread and butter, mostly based in Minnesota or elsewhere.

Mary Grove 34:15
This is a question. It’s a good mix. It’s a really good mix. And so a lot of them are in Minnesota, but that’s not necessarily a requirement. And I think as we as we grow the fund and grow the vision and grow, the sectors that we’re in, that also is likely to expand. But I’ve found it’s really interesting that the Minnesota story that we’re telling is resonating really strongly outside of our home state. And I think it’s because maybe people don’t know some of the facts, their staffs. They just rattled off to you. I don’t know. And so it’s like if you’re going to invest in in back an ad tech company, should you do it here? Or should you do it in Menlo Park, and I can give you the case for why it should be here. And so I think it makes sense, right? It’s sort of like a Back to fundamentals. But I think especially now, as we look at coming out of COVID-19, you know, we will never, we can never afford to under invest in these sectors, which is how we feed ourselves how we care for each other how we work. And we just think we’re so uniquely equipped to back the next generation. And you know, to be clear, we’re not the strategy is not to invest only in Minnesota companies, the question is, what’s fine and back the best companies in the world no matter where they are. But the question is, can we uniquely support them with our infrastructure and the connectivity back into industry that we’re building for mentorship and expertise for, you know, help with due diligence for insurance for commercial and pilot opportunities? And ultimately, we hope for that path to m&a that we talked about earlier?

Jay Clouse 35:45
Starting a new venture firm in 2020. What does that look like for marketing yourself? Is it difficult to say, Hey, we have money to invest? Or are people just looking for someone saying, Hey, we have money to invest in deal flow becomes easy?

Mary Grove 36:00
Well, it’s been an interesting time in the venture market, right. And you have some firms who pull back entirely and are gonna sit it out for a little while others who are leaning forward more than ever others who are maybe negotiating discounts on valuation. But I think that I have seen that for firms who are open for business and actively writing checks the deal flow is tremendously strong. With my partner, Brett, we co lead the Minnesota investors group here locally, we were all sharing anecdotally that it doesn’t, you know, for the best deals, the top companies, valuations aren’t dropping, they’re as competitive as ever. I was talking to some colleagues on the coasts from other funds, and they’re there, they think the valuations are going in the reverse direction, they’re rising in San Francisco. And so I think that it’s been a good time, it’s actually a good time. If you look at historically, in previous economic recessions, the unicorn companies are the strong companies that have come out of those, it can be a good time to build and to buy into to the market. So but for us with the journey of Bread and Butter, so my my partner, Brett Brohl is a long time entrepreneur, multi time founder, and has been investing out of his his previous fund The Syndicate Fund since 2017. And so that’s the precursor fund for what is now Bread and Butter. And so we’ve had a lot of success, I think, with both of us have been actively engaged in the community since we moved here, but he’s been actively investing on the ground here in Minnesota for for several years. And so I don’t think we’re new faces to town, per se, but the the name is new, the focus is expanded. And I think the, you know, the appetite is stronger than ever.

Eric Hornung 37:35
How did you decide that? Brett and Stephanie, were the right teammates to start this up?

Mary Grove 37:42
Yeah, that’s a great question. And team is everything right? We ask, we always say people ask, what do you invest in? What do you look for most and, you know, the, the mantra that Brett. That Brett is always giving us he invested in team team team product market, right. And so just as you would with evaluating a startup, evaluating your colleagues, of course, I mean, it’s everything we spend your time with, you’re going to go in the trenches with for the next decade plus. And so the story of how we met is really cool. So my husband, Steve, and I have a nonprofit called Silicon Northstars, which is one of the ways that I got to know Minnesota to begin with. But we started this organization back in 2013, when we were living in Silicon Valley, and we actually have no plans to move back here to Minnesota. But it was to build a bridge between the place we had roots and the place where we lived at the time. And so our mission is to educate and inspire young Minnesotans from economically underserved backgrounds, towards features and technology, and underserved background economically underserved in our communities disproportionately means students of color. And so for the last seven years, it’s been a really phenomenal part of our our life. But every year we choose a cohort of 16 rising ninth graders, so summer before High School, we do a all immersive summer boot camp to help expose them to originally what Silicon Valley was to fly them out and do the best up tour, go to Google, Facebook, YouTube, Stanford, bunch of startups, we did design thinking. And then they had to form teams and start their own company come up with their own pitch, and pitch it a real Demo Day. And the idea is you come back you start High School. And we do these meetups around to help you get integrated with the community here until you go to college. So that program has evolved a lot. It’s grown. But in the earliest days when we were in the valley, we knew we needed on the ground help in Minnesota and Brett Brohl was one of the first people to volunteer his time and jump in and get involved and host our students and teach them about startup life and venture capital. And so that’s actually how I first met. But when I came here two years ago, our VC community is relatively small in numbers and so everybody, we know each other and work together. But Brett and I began collaborating on a bunch of things organically in the community. I’ve been a mentor and every one of his TechStars programs, he runs the TechStars foods food tech accelerator called Farm to F0ork. We’ve done guest lecturing office hours, we’ve organized the quarterly meetup that I mentioned for investors. And so it just felt extremely natural. And as I looked at, you know, who do I align with completely in terms of values, and mission and approach and founder first mentality, but have such radically different backgrounds and experiences and networks that we can bring, we have almost zero overlap in our experiences and network except for a small sliver in Minnesota, which is, which is a phenomenal experience to have in a working relationship. And then Stephanie Rich, who’s our head of platform, is just an incredible talent, who, she’s an entrepreneur and a creative, a journalist. By background, she was employee number one, another great startup story in a company called Particle, which is a in the platform in the Internet of Things space. But they’re a Minnesota company, grew here, scaled here ended up moving to Silicon Valley, they’re now a unicorn. But Steph was employee number one, and she completely set up, you know, all set up and ran operations for the company, has started a publication here locally called starting North started her own firm. And so we’re just a really great team. And I’m very excited about having a platform effort out the gate, which platform is becoming a very popular and I think, very important part of venture nationally. But typically, you see that at later stage series and above firms. And so for us to have that at this stage in this geography is very, very unique. But it’s also very core to our investment thesis, which is, we will build the best bridge back into the industries that we invest in, in the world. And that’s it’s going to require some resource. So I couldn’t be more excited about the team. It is such a inspiring, just inspiring to start every day, as we do. And we’re just a very, very complimentary team who just wants to work hard for our founders.

Eric Hornung 41:56
I love that you guys are starting with platform, Jay and I have a soft spot for platform and venture.

Mary Grove 42:01
I do too.

Eric Hornung 42:02
I have one last question. What’s the best pitch you ever heard coming out of the Silicon Northstars?

Mary Grove 42:09
Huh? The best pitch? So each year we’ve we choose? The way we do it is we choose one specific challenge. The challenge is the same. The question is the same that each team works on. But it’s always solve this challenge with an approach that leverages technology. So one year, it was how to kind of crazy to look back on it now. But a few years ago, the challenge was how to use technology to reduce trying to feel the exact verbiage but it’s basically how to reduce police brutality and violence towards communities of color. Like, can you imagine, a few years later, I was looking back on some of those solutions. And the students have a very real and raw perspective on on some of these issues. Another challenge we asked them to tackle was a question of food deserts. You know, in the Twin Cities here, one year was about how to bridge better, more productive and more collaboration between immigrant communities and local populations. So pitches are really cool. Like some of them have leverage, there was one hardware solution that leverages AI to reduce bias in the interview process. I mean, keep in mind, these these kids are 13 and 14 years old, like pretty remarkable. So I seeing that I couldn’t be more hopeful about where the future is headed.

Jay Clouse 43:18
My last question, this is gonna be a tough one. One of your colleagues from Silicon Valley says, Okay, I am open minded. What other cities across the country should I really be looking at putting Minneapolis aside because it’s probably going to be number one. What are some of the first city names you drop?

Mary Grove 43:38
Sure that that’s actually a pretty easy question for me because it goes back to my Google for entrepreneurs days, right. And we’re we’re scouting cities all across the country. And I think if you looked at the quick the shortlist of Google for now Google for startups, tech hub partners that probably answer that question, but some of the places that I have the most fondness for because of their vibrant ecosystems include the Research Triangle, so Raleigh Durham spent a lot of time there really love the community there. Nashville is just a fantastic place in particular as a healthcare, having a health care investment practice. Now that’s that’s where I’m sure we’ll be spending a lot of time. Chicago, of course, is the darling of the Midwest from for a number of reasons. But I love that, Austin, these are places that you may expect me to say, but I think some of the other ones that are that are great. Of course, Denver boulder is always top of those lists. But there’s a lot of other places where we have seen that spent a lot of time so to these like Madison, Milwaukee, Tulsa, I was born in Iowa, so I have to include something in Iowa there really is a maybe spend time in these communities. There’s so much there and there’s just so much opportunity. So you know, my belief is that, but I guess my pitch to those who are thinking about it, just come come out. Spend some time get connected with just one person in the community, everybody here is always very, very willing to help. And so, you know, we can help connect you into five other groups or places that you should visit. And just to get a flavor for what it’s like, but I recommend you look for your local, you know, the local tech hub or co working space, every city has their kind of flagship one, spend a couple days there, get to know people and see what it’s like. But it’s pretty magical.

Jay Clouse 45:23
Awesome. Well, Mary, it’s been so great having you here on the show. And finally get to chat with you. We’ve we’ve heard your name quite a bit. And so it’s great to have you here in the flesh. If people want to learn more about you and the work that you’re doing at Bread and Butter Ventures, where should they go after the show?

Mary Grove 45:38
Sure, you can find me I’m pretty active on Twitter, I’m @marygrove on Twitter, we’re also @bread_butterVC. And I’d love to I would love to hear from you. We’d love to hear your thoughts on the strategy. Other cities that I didn’t mention that we should be looking at. And just generally would love to connect.

Eric Hornung 45:58
Alright Jay that was a that was a fun one.

Jay Clouse 46:01
Anytime that I get to talk to somebody about my time in Startup Weekend just warms my soul makes me happy. And Mary had a big, big part in making the underlying like financial necessities of that organization happen, which gave me the experience that I had, like, in that crazy in the other world works because of what Mary was doing. Eight years ago, I was able to like fundamentally changed my own life and trajectory. And she had no idea but here we are talking.

Eric Hornung 46:32
Yeah. Who are you without Mary Grove? Think about that?

Jay Clouse 46:36
I don’t know. I don’t know.

Eric Hornung 46:39
I mean, you’re probably still Jay Clouse, but you’re, you’re much less of You’re much different of a Jay Clouse

Jay Clouse 46:44
Sincerely, I mean, Startup Weekend was such a unique and incredible organization. And back in the day, pre tech stars acquisition, it was crazy like that, that that group of people, that cohort of people, just like one of the most impressive, I don’t know, it’s just hard to it’s hard to even explain like how amazing everyone involved that organization. She mentioned in Mark Nager, the CEO at the time, everyone that was organizing events for Startup Weekend globally in facilitating them, you would meet them and it’s just like, a different breed of person,

Eric Hornung 47:15
You know, and we’ve talked about, like, what’s the CES of 30 years ago, or what’s the SXSW of 20 years ago type thing. We hear those kind of old stories, I feel like what you were just saying, right there is like that, like it never really got to be as big as those other ones. But it was like a special time and a special place.

Jay Clouse 47:35
But it’s still like, early years since then, like if we if we fast forward 20 years from now, or looking at people who are deeply involved in the tech scene. And even the financing, I bet you’re gonna see time and time again that they have Startup Weekend routes in one way or another.

Eric Hornung 47:52
Speaking of routes, one of the things I liked that we talked about with Mary today was the silicon North Stars, we didn’t really spend a lot of time on it. But man, what a cool program for these rising ninth graders. Summer before High School, you always ask this question on the podcast. Yeah, you say, how did you even know you could do that? Like, how did you even know entrepreneurship was a path and just flying 16 ninth graders, letting them tour Google and YouTube and Stanford, having to pitch a business. I mean that I imagine that Mary Grove isn’t just changing your life with that kind of work. She’s changing a lot of people’s

Jay Clouse 48:29
Totally, super impressive, super cool. I also, you know, she has this ridiculous pedigree, Eric, from university to Google, through their Dutch auction IPO, to revolution. And now our own thing, like, those are a lot of crazy stepping stones to where she is now. And very humble. Every bit about that interview felt humbled to me, which is nice.

Eric Hornung 48:56
Yeah, it’s funny, because we’re talking about marygrove, changing people’s lives. I don’t know how involved she was in the actual Dutch auction process itself. But I remember reading in the Plex, when I was in high school, on my bed, and reading about the Dutch auction, and I don’t remember the exact place I was Don’t give me that face. So weird detail. And I remember thinking, because I had read about IPOs. And like how they work and like what the standard was, and then Google just did it differently. And I was like, wow, you can literally like it was like one of those revelations, that doesn’t really mean anything to most people. But to me, it was like you can do things differently in things in places that there is a very established way of doing things and do it based on principle and better. So I legitimately have not forgot about the Google Dutch auction. And when she said she was on the Google IPO team, I did not see that in my research. So I was pretty stoked.

Jay Clouse 49:47
What do you think about June 2020? As a time to start a new venture firm?

Eric Hornung 49:51
I think it’s always great time to start funding entrepreneurs. Okay, that was a political answer, but great answer. I really do think I opened up The podcast was talking about leaving the packers and going and starting your own team, which is taking the kind of revolution Rise of the Rest I mean, they’re on everything there. I said Packers because Jays a Packers fan listener, if you didn’t know, I could have said cowboys or Yankees or any other big name team.

Jay Clouse 50:15
But if you want to take that example even further, like, in that example of my second string quarterback behind Aaron Rodgers.

Eric Hornung 50:22
I mean, you’re on the Packers does, it doesn’t matter?

Jay Clouse 50:24
Of course it matters.

Eric Hornung 50:25
Okay, fine, we’re not going to dive down this metaphor, I just wanted to call it out and say that I am a huge fan of emerging managers, first time fund managers, when people spin out some of my favorite people we’ve talked to on the podcast, left a Silicon Valley firm and came to a different place, or they had some sort of experience. And they went out on their own. And they became both entrepreneurs and investors. And I think that those are some of the most enlightening and interesting interviews we have, because you’re both an entrepreneur and an investor.

Jay Clouse 50:59
Yeah, and I mean, I’m sure there’s some part of Mary in doing this, that just wanted to have even more control and do things her way. Like, I think if if you have that feeling of, I just want to do things a little bit differently and do it my way, then. Yeah, leave the Packers start your own team, do your thing.

Eric Hornung 51:16
Now we’re still in the metaphor.

Jay Clouse 51:18
You only have one life to live. You gotta live the best way you can just like our friends at Ethos Wealth Management say.

Eric Hornung 51:22
of that. Here on upside. We talk about a lot of cities. And you you hit her with the specific question, Jay, and she brought up a lot of kind of the names that we know the names that everyone’s talking about right now. Austin is so cliche at this point. It’s almost Silicon Valley and like the amount of press it’s getting, but she also mentioned Madison, and Milwaukee, which I love. And then she mentioned Tulsa. I was not expecting Tulsa.

Jay Clouse 51:48
All of those. Our first answer was Raleigh Durham, the research shrine. Right.

Eric Hornung 51:53
I just think that’s a different list than we’ve received from some other people. So Madison, Milwaukee, Tulsa, Raleigh,

Jay Clouse 52:00
Raleigh Durham, sorry, no Ohio cities. I’m not I’m not saying I’m mad about it.

Eric Hornung 52:04
You seem pissed. I mean, you are. I can see your face getting redder.

Jay Clouse 52:09
Not only. I mean, I actually put a bullet point that said no, Ohio question mark.

Eric Hornung 52:13
Isn’t it nice when we get out of our little bubble Jay,

Jay Clouse 52:16
It’s nice. We need to spend more time doing it. Well, dear listener, if there’s a place outside of our bubble that you think we should explore Next, you can tweet at us @upsideFM and let us know or email us hello@upside.fm. And let us know we’d love to hear from you. We’d love to explore new territory, new companies, new investors new territory, again, you can email us hello@upside.fm. Otherwise, we will talk to you next week. That’s all for this week. Thanks for listening. We’d love to hear your thoughts on today’s guest. So shoot us an email at hello@upside.fm. or find us on Twitter @upsideFM. We’ll be back here next week at the same time talking to another founder and our quest to find upside outside of Silicon Valley. If you or someone you know would make a good guess for our show, please email us or find us on Twitter and let us know. And if you love our show, please leave us a review on iTunes. That goes a long way in helping us spread the word and continue to help bring high quality guests to the show. Eric and I decided there were a couple things we wanted to share with you at the end of the podcast. And so here we go. Eric Hornung and Jay Clouse are the founding parties have the Upside podcast. At the time of this recording? We do not own equity or other financial interest in the companies which appear on this show. All opinions expressed by podcast participants are solely their own opinion and do not reflect the opinions of Duffin Phelps LLC and its affiliates under collective LLC and its affiliates or any entity which employ us. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. We have not considered your specific financial situation nor provided any investment advice on this show. Thanks for listening and we’ll talk to you next week.