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Capital Bread and Butter Ventures

Bread and Butter Ventures: The Q&A

When Bread and Butter Ventures pulled back the curtain last month, we sat down with the B&B trio — managing partners Mary Grove and Brett Brohl and head of platform Stephanie Rich — to talk the new endeavor, the Minnesota entrepreneurial scene, and what their team could contribute to the longterm health of the ecosystem.

There was too much to pack into a short news article. So, for your reading pleasure, here’s our full Q&A with the B&B crew.

This content has been lightly edited for clarity and length. Do you think starting Bread and Butter Ventures now is building on an existing entrepreneurial foundation in Minnesota or is it taking a step toward making Minnesota known for that kind of a focus?

Brett Brohl: I’ve been a part of the Minnesota entrepreneur community since 2009. When I moved here, I was a founder. And I remember — and part of this is on me, but part of it is the community wasn’t that well developed in 2009 — I remember not being able to find other startups or other entrepreneurs. It wasn’t easy. That experience that I had as a founder living here has been a part of what drives me, and it’s why I’m so involved in the community.

I’m really proud of where the Minnesota entrepreneurial ecosystem has gone. It’s come a long way, specifically in the last six or seven years thanks to the work that a variety of organizations are doing.

I started The Syndicate Fund here in 2017, and with Bread and Butter Ventures, something we’re really excited about is leveraging all of the assets that we feel make Minnesota special. To help our portfolio and the portfolio companies that we invest in. To help and plug into the Minnesota community to make it stronger and better. We take pride in being here. We take pride in what Minnesota has to offer.

But we also are going to continue to invest globally. We have eight portfolio companies that are currently from Minnesota, and we want every great Minnesota founder to pitch us and reach out to us. But we also want to invest in the best founders in the world, and then leverage everything that’s great about Minnesota to help those founders.

Mary Grove: I moved here a little over two years ago from Silicon Valley and I had spent the first 15 years of my career at Google. I started the Google for Startups team. We did work in over a hundred countries around the world with startups and ecosystems. Having experienced a lot of entrepreneurship around the world and then joining Revolution where I was in an investment partner the last couple of years focusing on the U.S., and now moving to Minnesota, it feels like in many ways it’s come full circle.

I truly believe that we can build and back global companies by leveraging the opportunities —the sectors and expertise, the bread and butter — that I see here in Minnesota. I think it’s really special and differentiated. I’m completely all in on that vision. In the announcement post, you mentioned COVID-19 a few times and how the current state of the world points to the need to find as many entrepreneurs as possible and really enable those founders to bring their ideas to the forefront. Was the pandemic a major spark point of forming Bread and Butter Ventures?

MG: From my perspective, we’ve been investing for a long time in various capacities. So, the work has been long underway, and we’ve also known each other for a long time. Brent and I first met about four years ago, before I moved to Minnesota. My husband and I run a nonprofit called Silicon North Stars which seeks to help inspire young Minnesotans towards the future and tech.

Brett was one of the first to really raise his hand and support our students. We helped introduce them to the world of venture capital food and ag tech. That’s how we met. And I think over the past two years that I’ve been on the ground it’s just been a very natural, organic collaboration. All three of us have teamed up on a variety of efforts in the community from mentoring to teaching to office hours.

And it’s just felt like such a clear path to me of who’s the right team to collaborate with. I would say COVID-19, if anything, just accelerates our desire to be even more active in these sectors specifically, because, you know, as we alluded to in our post, we know that coming out of this crisis, we can never afford to under-invest in sectors like healthcare, food and ag.

So, we do feel like it’s created a stronger sense of urgency. But the work and the plans have been something that we’ve been excited about for months and years. In the announcement post, you mentioned Post-it Notes and pacemakers and thermostats… All things that — well, thankfully, one of those things has not impacted my life yet. I’ll let you guess which one it is — but those are all major things that have impacted thousands and thousands of lives, big or small.

How do you feel your team is posed to find the next Post-it Note or the next pacemaker or the next thermostat?

BB: One of the reasons that, you know, we all love [Bread and Butter Ventures] and we all think that it’s very additive for us to work together is because of the diverse backgrounds and diverse perspectives. We have the diverse experiences we have. I come from an entrepreneurial background. I’ve built companies. I’ve also failed pretty tremendously. So, I’ve had both of those experiences and that’s a unique perspective.

Our different backgrounds and different expertise will hopefully attract entrepreneurs to us. And we also have no shame in actively seeking out the founders and ideas that we think are great in the areas that we have some experience in. Hopefully that combination of background experiences and connections that we have within the industry will allow us to stumble across some great founders.

And then hopefully we can support those founders through our platform and through our networks to, to build that next great thing. So, it’s not just about finding them — it’s also helping them through that process. That crazy rollercoaster. And that’s one of the big reasons we’re excited about the platform with Steph is working on.

MG: Exactly. Just to kind of build on that… what we want to be able to do is enable people. People have amazing ideas, and we want those to come to life and not fall victim to some of the pitfalls that we all face when we are trying to be entrepreneurs. [If we can] kind of mitigate some of that risk, if we can help overcome some of those barriers to becoming a huge company and get some of those ideas to market, I think that’s a huge win for everybody. What specific plans does Bread and Butter Ventures have to really focus on the diversity and inclusion of  the founders that you’re going to be reaching out to or bringing into the portfolio?

BB: I guess the one thing I want to lead off with — and I’ve heard in various conversations, we all say this in a different way — but we believe that diversity and inclusion isn’t charity. It is good for business. And the reason that we believe in investing in diverse founders and having a diverse team and having diverse perspectives is that it’s also good for us. That adds value to our investors and adds value to the work that we do with our fund, with our community… It is good for everybody.

MG: Speaking specifically to the venture capital industry for the moment around this issue. We know that there’s just so much work to do to dismantle the institutional barriers and bias in our industry. And that starts at every level.

“People have amazing ideas, and we want those to come to life and not fall victim to some of the pitfalls that we all face when we are trying to be entrepreneurs.” — Mary Grove

blck-vc-code-2040There’s who’s providing the capital, who’s making the investment decisions and writing the check, and then of course there’s a question of who gets the capital. What does that portfolio company pipeline look like? When you invest in companies, who’s on their management teams? On their cap tables? Who’s on their boards? And so at every layer of that stack, we want to infiltrate from the ground floor, helping our companies and building our firm in a way that puts that at the forefront.

So the first [specific measure that we’re committing to] is transparency — reporting once a year the metrics of our fund and seeing how we build upon that at a founder level across the portfolio. The team level is obvious to people, but how do we, how do we build our team in a way that’s very inclusive and respects diversity?

When we think about the platform that Stephanie is driving and building, how do we think about bringing the right resources to help our founders. Seed stage is perfect for this, right? You’re just building your team. How do we help with curriculum, with training, and with sourcing great candidates for boards?

How do we help with that support layer? Industry-wise, we recently participated in the “We Won’t Wait” day of action with Blck VC and we donated, through that as well, to a great organization called Code2040.

So, we’re deeply committed. But I would say it’s business as usual for us, but we really feel, particularly coming from Minnesota, the responsibility to be hyper-vocal and hyper-active about that.

Steph, maybe you can talk a bit about our approach to community and how that impacts our funnel.

“We believe that diversity and inclusion isn’t charity. It is good for business.” — Brett Brohl

Stephanie Rich: Right now, as we establish what we’re doing officially… what we’re doing is doing research by talking A) to our founders B) to other founders and people within our ecosystem and community, and then doing a lot of research with other folks who are in platform roles on what has worked and what hasn’t worked.

How do we build out this amazing platform for our founders that also enables people in our community to benefit from it? And how do we play in our community in a way that encourages equitable access to capital, equitable access to connections — all of these resources that we’re talking about.

That’s what’s top of mind for us as we build out platform and community.

Read more about Bread and Butter Ventures’ commitment to diversity and inclusion.

Bread and Butter Ventures

Stephanie Rich, Brett Brohl, and Mary Grove of Bread and Butter Ventures So, a couple kind of big picture questions. The three of you obviously have been involved in tech and startup and entrepreneurship for a long time in various aspects and various locations.

If you look into your crystal ball five or 10 years, what do you hope the entrepreneurial scene looks like in Minnesota and how do you hope it has evolved from where it is today?

MG: It’s an outstanding question. I feel like we should go around the horn and each answer it.

There’s a pause.

BB: Why don’t you start, Mary?

MG: (Laughing) Okay. Perfect.

Well, I certainly hope five to 10 years from now, we are globally renowned for our leadership as a firm and as a state in the sectors that we’re really focusing in on. And it’s a very deliberate focus on food and ag tech, healthcare and enterprise software. I hope that we have a dramatic increase in the number of early-stage companies started in and funded out of Minnesota.

We have a lot of talent here. We need the training, the resources, and frankly, we need the capital. And I hope that Bread and Butter Ventures has successfully raised multiple funds full of capital from not just our home region but from all across the country — and maybe even the world — to be deployed out of this home base because people also see the value that we so clearly see.

I hope that… this crisis and tragedy and the murder of George Floyd becomes the inflection point that we write in the history textbooks as when everything changed. And we’re right at the epicenter of that. And it feels more urgent than ever. And also, in many ways, more feel more optimistic than ever that people are talking, people are listening, people are acting.

SR: The other thing I would love to see over the next five to 10 years is a couple of really great big exits. And when I say “great,” I mean exits that are really wonderful for the team and the staff. That’s one of the things that has made Silicon Valley and New York really interesting places for angel investing in early-stage companies — you have all of these people who have been able to start being involved in that because their companies have been successful.

So, I would love to see… some of these big exits. I think that those could really reshape some of our ecosystem.

Minnesota investments

BB: Those are all great answers. In 10 years, I want it to be a flywheel. And that ties in to what Mary said and what Steph said. I want it to be a flywheel of exits and reinvestment of that capital back into the entrepreneurial community which will drive new founding to start. When you’re employee number three or employee number five or employee number 10 of a company that exits for a billion dollars, all of a sudden you have capital, and you might have the drive to be that next entrepreneur that’ll be the CEO of that next one.

And we don’t have that flywheel effect in Minnesota. I’ve seen a dramatic increase of investible companies founded in Minnesota since the time I was here for sure, but we’re still a really early-stage community. And, you know, for us to really be globally recognized for our startup community, we need to have that flywheel effect in motion. That that’s what makes it special. That’s what it really takes. That’s what will provide is exponential growth as a startup community. Now, we’ve seen a lot of chatter online. One thing that keeps coming up is, “What a great team.” What do you like about working with each other?

BB: Man, what do we like about working with each other…

MG: Brett has to think so long and hard here. I’m going to give him a minute. “Rifts Already Exposed in Bread and Butter Ventures!”

BB: (Laughing) That would be a pretty funny headline.

First of all, you’re right. We’re great. I’m just joking. Just joking. It’s this, right? You know, even in an interview, we can joke around and have fun.

It’s it is genuinely enjoyable to work with Steph and Mary. It’s amazing how much we can all get done independently while still being on the same page without having to talk too much. We’ve gotten together one time in the last four months and that was last week, and we still pulled this off.

Everybody has a great attitude. Everybody respects each other. And I think that’s really important. We all very much respect each other and respect each other’s opinions, even if we have a different opinion, potentially. There’s a high level of respect.

We can have fun together, and we also all enjoy each other personally. We were all getting dinner together or a drink together prior to working together. It’s a fun environment.

“How do we build out this amazing platform for our founders that also enables people in our community to benefit from it? …That’s what’s top of mind for us as we build out platform and community.” — Stephanie Rich

MG: I agree. 100%. Both Steph and Brett are people deeply respect and admire, and I have for a long time. I think that all three of us have an unbelievable amount of overlap in our core values. We sat down at the beginning of the process and we did a core values exercise, and there was like literally 98% overlap. We have that foundation. A commonality. And yet all three of our experiences, our skillsets, our community, our networks that we bring… are all completely different and complimentary.

I personally love working with people who are different from me in perspective and style because it pushes me, and it challenges me, and it makes the outcome so much better. So, at this inflection point in my life, it’s a huge driver of my motivation.

SR: It has felt extremely comfortable and natural. I would echo everything that Brett and Mary have said. It’s a great exercise to go through a rebrand right at the beginning, because you’re dealing with hilarious things of logos — and this is a weird example — but, it’s something that none of us necessarily focus on, but we have opinions, and that process was so smooth and easy and collaborative. For me, it was such a good indicator of how we’re going to work together.

And at this stage in my career, to echo what Mary was saying, I look for career opportunities with people I want to work with. With people that I get excited about. That I am proud of. When good things happen to Mary and Brett, I am thrilled. And I also know that they will make good things happen, which is something special to have in your work life.

Alex Skjong
Alex oversees the content produced for BETA, Twin Cities Startup Week, and When he’s not writing or editing, there’s a good chance he’s enjoying a refreshing brew and explaining the merits of heavy metal (of which there are many).