There’s no doubt that companies, big or small, can have a tremendous influence on the community. And in being a founder, CEO, and a leader, it can come with great responsibility. I’ll avoid using any more famous superhero references but wanted to share the most important facts I gained from this conversation.
Almost 81% of all VC firms don’t have a single Black investor. In a sample of 160 firms with more than 2 people, only 5 have at least 2 Black investors. Another study found that Blacks are underrepresented in the executive ranks of startups by almost 82%.
This is a major social issue that needs solving. There are so many great ways startups, founders, and venture capitalists in our tech community can use their powers for good and help solve this not only in our industry but in the country as a whole. That’s why in today’s episode, we’re bringing on someone who believes in solving this major issue and bringing in the good of our Midwest communities and leaders.
On today’s episode of the Powderkeg Podcast, we’re talking with Mike Asem, Partner at Venture Capital Firm, M25.
As a partner at M25, Mike has participated in nearly 100 investments in early-stage companies across the Midwest. Outside of his responsibilities at M25, Mike is a Kauffman Fellow (Class 24) and a board member at BLCK VC, leading initiatives in the Midwest to connect, engage, empower, and advance Black venture investors. Before joining M25, Mike founded The Anvil, a co-working space and startup incubator on Purdue University’s campus, where he helped launch the first Purdue startup to be accepted to Y Combinator. Tune in for more!
In this episode with Mike Asem, you’ll learn:
- How to find a career in Midwest Tech
- Key advice for tech entrepreneurs seeking to raise capital
- Mike’s thoughts on racism and adversity in tech
- Backstage look into the investment ecosystem in Chicago
- Mike’s greatest hopes for startups in Mighty Middle America.
Figuring out your next career move doesn’t have to be so stressful. So why not try Powderkeg Matches?
By joining Matches, you’re joining a community of thousands of top professionals in the Powderkeg community to get connected with outstanding people at the hottest tech companies between the coasts. Get matched with great employers, land your next major opportunity, and get started today!
Please enjoy this conversation with Mike Asem!
If you like this episode, please subscribe and leave us a review on iTunes. You can also follow us on Soundcloud or Stitcher. We have an incredible lineup of interviews we’ll be releasing every Tuesday here on the Powderkeg Podcast.
Links and resources mentioned in this episode:
Companies and organizations:
- Racism Won’t Die 2020…but now is the time to give it a terminal illness
- 💥Mighty Middle Tops Lists—🦄+1 Midwest Unicorn Exit—🤓Call for Entrepre-NERDs
- 💥VCs Take Action—🚂Leaving Salaries in SF—💸10+ New Fundings & IPOs
Enjoy this conversation? Thank Mike on Twitter!
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Mike Asem 00:00
When you want to attribute success to yourself, the best way to do it is in a small team and a company that’s looking to hit high potential targets.
Matt Hunckler 00:07
Yeah. Welcome to the powderkeg podcast the show that plugs you into the massive opportunities in startups and tech hubs beyond Silicon Valley that are exploding with potential. I’m your host, Matt Hunckler. And in today’s episode, I’m talking with Mike Assam partner at venture capital firm M 25. As a partner at m 25. Mike has participated in nearly 100 investments in early stage companies across the Midwest. Outside of his responsibilities and 25. Mike is also a Kauffman fellow, and a board member of blck VC. I’m not sure if that’s pronounced black VC. But it’s BLC KVC leading initiatives in the Midwest to connect, engage, empower and advanced black venture investors. Before joining me 25 Mike founded the anvil, a co working space and startup incubator on Purdue University’s campus where he helped launch the first produce startup to be accepted to Y Combinator. He and I actually grew up together in West Lafayette, Indiana. So you’ll hear a little bit about that. I hope you enjoy this conversation as much as I did. Here’s my cousin, Mike, thanks for being here today. Man. Where are you now in from I know that that’s a rhetorical question for those that are watching the video version of this podcast. But where are you dialing in from?
Mike Asem 01:33
Yeah, I’m coming in from Bucktown neighborhood in Chicago.
Matt Hunckler 01:37
Nice. Well, and for those that don’t know, the our context, you and I kind of grew up together at least for part of our childhoods going as far back to Mrs. Thompson’s class and kindergarten. And what the heck was the name of our high school Cumberland? Yeah, really Elementary.
Mike Asem 01:57
They don’t do Cumberland crusaders anymore? They don’t know they’re now the Cumberland bucket fillers. Bucket fillers. This is a fact. I knew I’d shock you because I was shocked not
Matt Hunckler 02:09
in fact I like the alliteration of Cumberland crusaders more than the Cumberland bucket fillers.
Mike Asem 02:16
Yeah, well, for another day,
Matt Hunckler 02:19
I guess. I guess I’m a proud bucket filling alum but I actually kind of wanted to take it take it back to those days because I think you and I shared a similar passion for technology back in those days and I remember your your bedroom as a kid being filled with like the coolest like hardware tech. At least of all my friend group at the time. Do you remember when you first kind of got into tech and like what it was about technology that kind of sparked your interest?
Mike Asem 02:51
Yeah, I mean, that’s a that’s a great story. Like back like not many people know about me, but to this day, my dad is thoroughly disappointed. I’m not an engineer and still doesn’t understand or believe that I have any transferable skills. So yeah, I had Lego Mindstorms. I had all the connects and all the awesome stuff and I just loved building stuff. I mean, I just thought like, things that like creating building innovating was was just super fun and making things work figuring out how things work was super cool. So
Matt Hunckler 03:21
well and you kind of caught the entrepreneurial bug early too because I remember at one point you were the competition in school when we were making those like Beaded Lizard Gecko things. I don’t even know what you would call those. What did you call it?
Mike Asem 03:35
Yeah. Oh, I don’t know. I? Yeah, they were just beaded things.
Matt Hunckler 03:42
They’re repeated things that kids were willing to pay money for.
Mike Asem 03:45
My flagship product was the Mr. Hankey. Like no one had designed and Mr. Hankey, there was no blueprint for Mr. Hankey. That’s right. I had been Mr. Hankey. That was my that’s my secret sauce.
Matt Hunckler 03:56
Yeah, I think that’s when you really pulled ahead on the competition there and just you created your own category of beaded Christmas poos
Mike Asem 04:06
as one does, what was
Matt Hunckler 04:08
it? Do you remember what got you into entrepreneurship and even like thinking in that way of like, Hey, I could make money doing this. Like, how did you come about with that? Do you remember?
Mike Asem 04:20
Yeah, you know, I don’t know. I think it’s just something that I always had an itch for. Just the idea of one plus one can equal three figuring out how to, you know, make create, you know, create value, right? I think was a was a best fascinating thing for me. I shared a story recently where you probably don’t know this because you weren’t close enough in my territory at the time but there was actually a story to be told of me as a neighborhood. Not toddler but not preteen yet. Were all our neighborhood kids. I got us together and said Hey, I bet we could increase our buying power. We just pulled our cat pulled our money gold pulled Are allowance capital and, and then just, you know, kind of funded things together. You know, when my parents found out because due to my sister told him that we had cash buried in our backyard from old neighborhoods, kids, that didn’t last very long. And I can totally understand why. But yeah, just something something about the way my brain works, I guess.
Matt Hunckler 05:19
Well, it’s definitely interesting to know that context. I didn’t know that about you, which is hilarious, because I don’t think you were more than a mile away living on Linda lane. But you know, that’s, that’s like may as well be in a different city when you’re a kid and don’t have
Mike Asem 05:33
a right. I’ll have a car. I wasn’t allowed to bike that far yet. Yeah,
Matt Hunckler 05:37
same same. We had more protective parents. I think. That’s really cool. Man. I didn’t know that. That’s interesting context for what you’re doing. Now. I’m 25 Group investing in in startups. And I know, that was something you were drawn to very early on, when startups became more of a quote unquote, thing, and even ran a chapter of what eventually became powderkeg, or at least the community that kind of is the power behind powderkeg back in, probably, I don’t know, 2009 or 10. Even back in the day when you were at Purdue. Tell me a little bit about your environment, then and what was going on for you. That kind of led to I know some of the things of where you are today. I’m 25 group.
Mike Asem 06:20
Yeah, no, absolutely. So it’s interesting. I, at the time at Purdue, when I was there, the entrepreneurial community was wasn’t what it is today. Right. I think that’s changed a lot over the past several years. And there really wasn’t a ton of community, as you know, like, I kind of jumped at the chance to like, help out with urgent in West Lafayette at the time. And also, I had been working on something called the anvil, which became a co working space and incubator at Purdue. But even prior to that, I was trying to figure out community and I actually spent time in a program called the bold Academy, which ran, I think, once in San Francisco, and it was basically like, is it real world weather in the house? Right? Like, are you split, we’re in the house of all people who were interested in social and tech entrepreneurship. And at the time, you know, I really wanted to really believe I wanted to be just to start a company and build a tech company, and just being able to spend, you know, 10 days with a bunch of really inspiring other people from very different paths, and be mentored by, you know, Steve Jobs, former private chef, and the guy who used to fly Warren Buffett around in his private plane all the time. And Justin Rosenstein is the founder of Asana, which at the time we didn’t know was, you know, the unicorn that it is, right. I mean, that was all really fascinating for me, and continue to kind of enforce something in my mind, which is the power of relationships and the power of people, right. And, you know, say this to the ends of the earth, VC tech, it’s a people driven business, and we talk about it like it’s finance, but for me, it’s a cluster of human behavior.
Matt Hunckler 07:59
Yeah. 100% What, what was the culture of bolt Academy? Like? Like, what are the some of the things that you think made that micro community? Yeah, magical.
Mike Asem 08:12
Absolutely. I mean, I mean, first of all, it’s like a curiosity, like a passion for curiosity, passion for learning, seeking to understand truth seeking fulfillment. I mean, one of the best examples I could think of from a culture standpoint is I knew at the time in Lafayette, West Lafayette, Indiana, there could be a very different experience. If I was sitting in a coffee shop with someone and I told them, you know, if I’m in San Francisco and Alamo Square Park, I might say, Hey, I’ve got this awesome idea. I’m gonna chase it. I’m gonna raise VC dollars. And then six months later, nine months later, I come back to you, I’m like, Yeah, I failed. You know, in normal square park, you’re probably gonna, the person’s probably gonna get back to me. Oh, cool. Would you learn what you gonna do next, right. In West Lafayette. It’s like, Oh, so you’re still unemployed, and a failure? Okay, yeah. But that’s real that that was like a very real thing. And one of the very first things I wanted to be an influencer on or impactful within my community at Purdue and in West Lafayette was just that tolerance for failure. And you know, I wasn’t the only one right I surrounded myself by folks like Christian Anderson there’s high alpha and at the time k and a studio scientist cetera, right, you know, folks like Christian and others, yourself included, right? Were have already caught that bug and understood, like, you know, tolerance of failure is a key foundational point, to be able to explore enough to find and build things that are truly disruptive in the marketplace.
Matt Hunckler 09:35
Yeah, that’s, that’s a great thing to call out. And I even just, you bring it up that story had brought so many flashbacks of those kinds of conversations early on in my own career. And I feel like the culture in the Midwest in a lot of ways has shifted for the better. Those like small little groups of you know, individ Jews who are more comfortable with failure has now become more of a community and bigger clusters, whether that’s in West Lafayette, Indiana, Indianapolis or Chicago, even, obviously bigger cluster in Chicago. It’s been really cool to see that, that kind of evolve. And I want to get into some of the trends that you’re seeing, because I know you get to see a lot of that you talk to a lot of founders all over the Midwest. But I do want to come back to sort of that time at at Purdue, and kind of how you made that leap into venture. What did that part of your career journey look like? And were there any key individuals that kind of helped you along that path?
Mike Asem 10:41
Yeah. Well, that’s a great question. I mean, I think it really stemmed from the work at the anvil that I was doing and the community I was surrounding myself with. So mentors, like a gentleman in rusty roof, who is originally from the Midwest, but now resides in the West Coast. To put you learn from rusty. So Rusty is a phenomenally successful person and a very eclectic, he’s a liberal artists like myself, but he’s done extremely well and technology work for Electronic Arts. Pepsi is an executive started and sold companies. He’s on the board of companies like glass door, previous board chairman for the Grand Mesa foundation. So I mean, Rusty’s resume is long and eclectic and super fascinating, including working on the President Obama campaign, right. So rusty really taught me the importance of personal life fulfillment, and understanding that if you can look at life as a portfolio of time and, and allocating that time to buckets that are fulfilling in a holistic life scale, rather than just like a work loop trajectory, you’re gonna you’re gonna have a whole lot of different decisions, you can probably make a longer journey. Guys like Richard offs, he was also pretty alone and former partner at foundation capital. You know, same same thing Russ Rich was, has been a mentor to me for years. And as someone who particularly as I’ve thought about navigating between my passions as an operator and a VC, like what actually makes me tick and, and how to be the best version of myself in that growth direction trajectory to so these are relationships that I formed through Purdue but also through my work, building the animal to do the animal for example, my my customer discovery process started with talking at home and then literally visiting co working spaces and incubators, all the way from 1776 in DC, all the way to plug and play and, and Skydeck and start x and you know, Cupertino and in San and Sunnyvale and Berkeley. So, going from there, right? Working with founders, building my relationships, understanding. The Anvil allowed me to get known for something because one of our first companies Mimir wood became the first group company to go to Y Combinator and Amir has now been acquired by hacker rank at an awesome tech company, now still based in Indianapolis. And, you know, when that happened, people assumed I knew some about tech. And that helped me out a lot. And Chicago ventures, gentleman by the name desert, Austin, offered me a chance to be a student Fellow at Chicago ventures. And, and that was fascinating for me, just seeing that side of the table. And throughout my career, as I continued as an operator for a venture backed company and continue to as a Director for Research Foundation. My ability to understand what was happening in the, you know, VC startup environment, as well as flesh out my network and have what became a very proprietary and valuable network for sourcing deals, helping companies etc, made me put me in a great path to enter the VC space.
Matt Hunckler 14:00
When you were looking at all those kinds of different patterns. I’m sure you were seeing lots of failures, because you’re in the startup space. And you’re seeing the ones like Mimir, and prows. Been on the podcast, of course in the past. And I think you actually initially connected me with prod when he was going through one of your virtual virtual access accelerators. Yeah. And I, I’m wondering what kind of patterns that you saw with startups that you still use today when, you know, vetting companies to invest in for M 25 group? Or if you were to refer a friend to work at a startup, you know, what is it that people should be looking out for what which kinds of patterns or traits or cultural attributes do you tend to look for in companies or founders?
Mike Asem 14:53
Yeah, I mean, it’s interesting, like I think anyone who has to build to believe they can build a startup company has to have at least some On the amount of ego, I mean, to be completely It sounds weird, but it I believe it to be completely true. Because if you want to believe you can do something that’s according to the marketplace is to this point nearly impossible, because that’s what it takes to build a, you know, venture returning outcome tech company, you’ve got to have at least some sort of like outsize confidence. Now, if that’s not matched with an appropriate amount of humility, we’ve got problems, right. And so you This is this weird, you know, special balance of, I think, like, just enough ego, and a lot of humility is paramount for me. But in addition to that, I think maybe more important than that is, for me, great founders are those that are phenomenal truth seekers, like, they can’t handle like, if it’s not the truth, they don’t want it inconvenient or not. Right. Like, if they find out the truth about the market is this and that’s not great. They’re fine with that, because at least you know the truth. And now they know what Walter knocked down or, or what not to chase. Right, what not to waste time on. I mentioned this, tell
Matt Hunckler 16:04
me a story or give me an example of like, how you might be able to identify truth seeking.
Mike Asem 16:11
Yeah, I mean, I think, you know, in a in a pitch with a founder. You know, we can ask some pretty, real questions about, okay, what’s happening here? Yeah. And that just the way they respond to that, you know, it can be like, well, you know, we think you might be this or if we point out something that’s clearly a vanity metric, and they are disagreeing or maybe, or maybe trying to point it at as something that, you know, isn’t what it is. That’s the case, I think, when founders are pretty clearly able to come and say, like, look, we get that there’s a lot to validate here. And unfortunately, this is, you know, show me where you’ve learned, right? Yeah, I think that’s, that’s a huge plus I, I love seeing the, you know, the chart that’s got a couple squigglies. But it’s basically that, and I love that chart,
Matt Hunckler 16:59
right? Overall, but is Yeah, ugly up and to the right,
Mike Asem 17:03
right, but but I like seeing the squiggles where it’s like, you can point to the inflection point and tell me what happened and why it happened and what you learned. And it’s not some sugar coated, or like, oh, like, all of a sudden, our customers figured it out. It’s like, no, it’s like, actually, we did this because we, our customers didn’t actually want this, like, we spent a bunch of time on it. They didn’t care. And we were forcing something down their throats we didn’t want but then when we pulled this out, and blah, blah, blah, and our customers are here. I think just actual, like thoughtful, genuine insight that doesn’t necessarily always paint you in the best light is your best way to show me that. You’re, you’re about the truth. You’re not you know, wasting your time on anything else.
Matt Hunckler 17:46
What about people who are maybe looking to join a tech company, like maybe they’re already in the Midwest, and they’re like, Hey, I hear I want to jump into Tech Tech, still hiring like crazy, despite there being I don’t know if the fact that there’s a recession is a political topic or not. I’m not trying to create a bipartisan Converse here necessarily. But you know, despite what’s going on with a pandemic, we can all agree that there’s a pandemic going on. Tech companies are still hiring. And so you’ve got a lot of people that are looking to get into tech who weren’t in tech previously. Meanwhile, at least what we’re seeing here at powderkeg, is you got people in the Bay Area in New York City who are like, man, the Midwest is on fire and like, wait, what kind of house can you get for a million dollars? That’s insane. Yeah, I’ve got a one bedroom apartment for a million dollars here. Right? Maybe Maybe I want to be close to mom and dad again? Or maybe I just want a better quality of life. What would you say to those people who are looking to find the right company to work for? Whether it’s a startup or a scale up?
Mike Asem 18:55
Yeah, I mean, I would ask yourself really like, Are you a long term incentivized person or short term incentivized person? And I would ask yourself, you know, how much of your like life equity do you have to kind of give up right now in exchange for potential value you could extract from a startup role? Yeah. Because it’s, it’s real. I mean, if you’re one of the first five or first 10 Buckle up, like, if you’re one of the first 500 Cool, like, you’re probably gonna get pretty good benefits, or even benefits. Yeah. And I think like, it’s just a realist, like, you know, gut check thing. I mean, startup startups are very romantic. But most of them fail, some in flames of glory, sums and some and less glory. And I would just think like, you as a as an individual need to think about what you’re passionate about. And if you’re ready for a challenge, and in look, I would also say this if you want to advance yourself in your career and prove yourself In a way that could set you up, not just like financially for life, but career trajectory. Think about it. Because guess what you when you want to attribute success to yourself, the best way to do it is in a small team and in a company that’s looking to get a high potential targets.
Matt Hunckler 20:16
Yeah, absolutely. That’s cool, man. And I think that’s a really good gut check for people. There are a lot of people that are just like, ooh, startups, and they go in and, you know, startups, a lot of times, it’s getting punched in the face repeatedly. And, like, why is why is this happening? Why did everyone say this was exciting? And that’s not their DNA?
Mike Asem 20:39
Yeah, I mean, look, it’s it’s not just getting punched in the mouth. It’s getting like, you go up and down the roller coaster. And in a startup, you don’t have the benefit of a just to like, apathetic, okay, week, like, or day. You have highs and lows, I talked about, like emotional nutrition, because that volatility volatile volatility does get to you. Yeah. I can speak for myself, when we, when the writing was on the wall for the company that I was a part of as a as a first employee. We, as as we wound down as I wound down kind of my, my day to day, with that I just unplugged for I think it was I gave myself three months. Whereas like, I need to recharge and like I can let people know, I’m a free agent, but like, my, my heart, my mind, my body, my soul, my spirit, like it was in it was on fire for the entirety of that time period. And, you know, it can be incredibly rewarding. Like I can’t think of a more rewarding work experience, but you just have to be ready for it. And but not everyone needs to do that.
Matt Hunckler 21:50
Absolutely. I can totally relate to that. i i There are a couple different startups I was involved with where I took three months off afterwards. Yeah, I can I can definitely relate to that. Well, you mentioned the sort of like ups and downs and the emotional toll. You’ve published some awesome articles recently. And you’ve got an awesome stuff. substack going, as well. And I want to get into that. But I just saw recently that article that you published on VentureBeat that was trending and lots of great chatter about it on social etc. Talk to me a little bit about why founder wellness is something that right now you’re deciding to write about? And why do you think that’s important for the health of a company as a whole?
Mike Asem 22:33
Yeah, absolutely. I’m happy to touch on both. So as far as why I’m touching on it right now. It’s primarily because you know, I’m looking at the macro environment, we’re all in the same, this is an insane time, where everyone on planet earth is going through some, some some hot garbage moments together, right. And it’s tough, the uncertainty alone is, is draining and stressful. So you talk about the whole world, everyone equal, anxiety, baseline is higher. And then you go to founders of companies, or executives, companies, or even just employees and companies. And you think about you’re also peaking stress already. So now is a time where I felt called to write more proactively and talk more practically about this particular issue. But it’s something I’ve always cared about. And an employee five has always cared about too. We are not super unlike a lot of VCs, and that we believe the team is the most valuable asset of a company, especially at the early stage, which is when we get involved. I think we’re really serious about this. And to the point where I’ve said it multiple times, there’s no better way to add risk to your seed stage investment, then overly disincentivize a team from the beginning when you believe that team is the most valued asset of your business, right. So in other words like that can take the form of predatory terms and a term sheet or simply put, you know, taking too much equity too early. Having a board kins and governance structure that adds unnecessary stress to the team, anything that’s not blocking and tackling for someone who’s literally trying to do what’s impossible. Can it can be tough, and I think as investors, it’s important to understand that if you do believe that your team, just thinking about it purely objectively, if you do believe that your team, the team of that company is the most valuable asset of that business, and the most important pillar of driving likelihood of success, then you should be a good steward of that asset. You should be finding ways to make sure that that thing is those people are, are as protected and taken care of and the best versions of themselves as they possibly can, just like you would with making sure they have a healthy balance sheet. Yes. I mean, it’s something that and I could go you know, I could talk more about just from a values perspective, why I feel that way. And as someone who you know, I think like general I really care for people and And one of my favorite parts of my, my job is I get to choose who I work with, on all aspects. But yeah, I mean, I think fundamentally, that’s, that’s something that I hope more investors and founders can hear it and take hard on.
Matt Hunckler 25:15
That’s awesome, man. I think that’s really good advice. If you were to say like, one thing that you’ve repeated the most to founders is one or two pieces of advice that is relevant to them. And that may be relevant to people working at a startup as well.
Mike Asem 25:32
Get some sleep. And that’s, that’s a that’s, that’s somewhat joking. But mostly serious, get some sleep. I myself, one of the worst breakers of this, I spent most of my, you know, up until a couple years, you know, a couple of years ago, I would wear I would sleep maybe for four to six hours a night for two weeks straight and then I would crash for like 14 hours on a Saturday. And that just isn’t was not healthy. One parent now. Now my wife, you know, Eric has like, way more weight way better at life than I am. And so she’s, you know, got me on this seven, at least seven hours of sleep thing, and I’m literally a better person.
Matt Hunckler 26:13
I agree with that. Man. I read the book. Why we sleep last year, that was probably my number one read. Most recommended, and it’s I mean, it’s basically a book with like, all the evidence of why you should sleep more. So that plus the purchase of this the app, man, thanks, awesome, dude, it’s, it’s great. Because it’s just like, you need this much sleep. I’m like, really? Do I really need that much sleep? And it’s like, sure enough, I started like taking the advice of, you know, technology. And it’s like, oh, yeah, I guess I was tired. I like just didn’t even it didn’t register, right? Because I too, was the four to six hour person. And even prided myself on that. When it was really a much, much bigger part of tech and startup culture of this, like hustle and grind, you know, sleep when you’re dead kind of mentality, I was very much a part of that system. And I still fight it. So definitely not say not professing to be cured by a book and a whoop strap.
Mike Asem 27:18
But oh, yeah, I just used to be like, I’d rather sleep for a quarter of my life instead of a third. Yeah. And that makes sense. But then I think about everything else I care about, which is like quality over quantity. And like, that’s
Matt Hunckler 27:32
conflicting values there. Yeah.
Mike Asem 27:36
But yeah, the other piece of advice I would give them give people is really, really, really be in touch about a partner. And it doesn’t, you know, it can be on all different levels. It’s very clearly important as investors, because, you know, you need to be asking yourself, Hey, do I want that face on my phone at four o’clock in the morning calling me when either we’re celebrating, or we’re doing the opposite? And do I trust them? To honor me and protect me as I trust them? With my life’s work? Right? Something I’m literally so passionate about, I’ve probably gotten into serious debt with I’ve preferred on salary with I’ve probably had to, like, spend all my currency with my partner spouse with right like, do I trust them? Like, can I trust them like that? Like, like a writer, die, co founder, right? And I think just founders really should think about that. And it’s really important to because look, if you’re, if you’re cooking with gas, like you’re going to have a lot of top tier VCs ruin, ready to check you want, right? But you’re also the same VCs that might likely forget about you the moment that you’re not going to be a DECA corn. Right, just that piece and and even just not what the VCs you know, the co founders to right? And the employees. Most founders don’t realize that when they build their next Google or Facebook or whatever, unicorn there is their favorite. Most people don’t most founders don’t think about all the people that have to fire on the way to that success, and all the heartbreak of betrayal potentially on that path to success. And look, don’t you can go the completely the wrong way. Just hire friends, which I would not do. But make sure you’re working with people of high integrity that also like their pedigree and integrity should be line in line with being top class for what you’re working with.
Matt Hunckler 29:24
It’s good advice, man. I I heard you say just how important it is. Not just because it startups but given the macro environment, which of course is not just the pandemic, but everything else going on socially around that it’s an election year. There’s huge police violence issues, which is of course flaming racial issues. Not just in the Midwest but around the country around the globe. And I’m I’m glad that this topic is getting On the oxygen that it needs to talk more about it. And before I really do open up that topic, I do want to just fully and vulnerably say, I don’t know the right way to talk about this topic. But I know that the wrong way is to not talk about it. And so I’m just curious if you’d be willing to share a little bit of your experience, because I know you’ve written a series of, of really powerful articles. And candidly, I learned things about your experience growing up black in the Midwest, that I just even though you’re my friend, as a kid growing up I wasn’t exposed to and, and that I will never fully understand because I grew up. Definitely not black for this thing from black, like
Mike Asem 30:46
DJing back then. So I don’t I don’t know about for this thing. But
Matt Hunckler 30:49
now you’re just lying. I was not a good teacher at all.
Mike Asem 30:56
No, thanks, man, I really appreciate that and appreciate the way you you brought brought us into this topic. I mean, the fact is that, you know, racism is an issue. And it has always been an issue. And, you know, you know, the first piece that the piece that kind of broke my silence with recently, at least, optically on the internet was was titled racism won’t die in 2020. And, you know, it’s, you know, a lot of people read that piece and, and left feeling a lot more positive than they might have thought they would have to read the title, but it’s just a very, you know, clear point of like, Hey, what’s going to be different this time around, that actually didn’t call just for like, a quick Band Aid, potentially, to appease a perceived writing crowd or whatever. But what could be driving long term impact to where our kids are our kids, kids aren’t going through a similar issue. I think one of the things that’s worth exploring here is that we’ve been talking a lot about implicit bias, which is a term I think a lot of us have been familiar for a long time. But some people it’s still new term, and just kind of this, you know, maybe less than conscious bias you might have against a certain people or group and the note there’s bias against, I think it’s important to acknowledge that there’s bias for as well that people might not quite quickly understand. And in, in venture, I think about it as this, you know, I’m looking at, you know, 150 deals, potentially potential deals a month, right? And I’m going to do maybe one, maybe two of those investments to this. And so if I’m, and I don’t have data, these aren’t publicly traded companies, right? There’s no like, you know, five years of historicals, right? Sure, there’s a pitch and business plan, whatever. But at the end of the day, you have to be like, a bunch of subjective things waived into like a couple objective things. Do I believe it? I’m excited, am I gonna do it? Do I believe in that person, again, team’s most valuable part of this business. So if I have whittled it down from 150, to five, and one of them is, and they’re all, you know, objectively, at this point equal, I’m probably going to lean with my gut of who I vibe with, right? I mean, I mean, that’s the path of least resistance that most people naturally drive themselves to. And guess what, like, culturally, you’re going to vibe with people that are culturally similar that to you, and whether you acknowledge that as racial or not like, I mean, race and culture are obviously separate. But, you know, it’s just a thing. So understanding that there’s bias for and bias against as well. And I think the the one thing I’d like to add to maybe the post I did before, recently dimension three posts about being good stewards or founders, is that if you’re meeting or working with someone doesn’t have to be a fabulous investment, it could be a co worker, it could be, you know, another founder in your ecosystem. Understanding though, even though that you might be treating them as a good steward, and aspiring to do so in that moment, that they probably haven’t been treated that way by some other people in their past, present and future. And seeing what type of an ally you can be to write those wrongs preemptively. If possible, right. So I’ll stop there. And
Matt Hunckler 34:27
you know, what are some what are some ways to be more proactive to help? Help founders, black founders, black VCs, which there are not a whole lot of. I mean, there’s not as many founders as well that are getting VC investment. Right. But in what you just illustrated, I know is a big part of that dynamic, right because if you UCs are predominantly white. And it comes down to who do you vibe with? And what’s your culture? Like? It’s, it’s not? Well, that person might not see that as racist. That is, in essence, what racism is, at least to my understand, I’m not trying to speak as an expert here. But like at least and see my own bias, right of who are we going to put on the powderkeg? Stage? And I’m using air quotes, because it’s a virtual stage now? Or who do we cover? In terms of the spark newsletter that we send out every week? You know, it’s, to me. Some of that work is around just being more intentional to say, Hey, have I gone outside my circle of friends? That may look a lot like me, right? And by nature of being in the Midwest by nature of that’s where my network has grown from may be predominantly white, and may not break into some of those other circles. And then how else can I get into those circles, or at least have connections into those circles to be pulling more founders, and I’m more, one of the things I tried to catch myself doing there is asking you to do the work of coming up and telling me how I should be more. Be less racist, I guess, is a better way of saying that. And I’m trying to be conscious of that, too, of not, not necessarily putting all of the work on someone else to say, hey, tell me what to do. Tell me what to do. And I’ll do it. Right. Yeah,
Mike Asem 36:43
no, I hear you. I mean, look, I can’t tell you what to do. But I can give you some frameworks, maybe think around, right, and that’d be great thing. I think that’s really the best I can offer. I believe the power of suggestion is more powerful here than a mandate. Right? So the, I think, an opportunity for a thought exercise is, you know, and you met your great, you actually, like one of the best people to be in a meeting with like, you’re, you know, super fun, regardless of who’s in the meeting with you. But, you know, think, you know, whether it’s you or somebody else, it’s thinking about this, think about yourself in the context of being interacting with someone that you like, really vibe with? Like, how does that person how does that version of you look, feel talk offer. And nothing of yourself with someone that you don’t really vibe with? Like, they didn’t piss you off? Like, they’re not bad people. But like, maybe you’re tired, maybe it’s the last meeting of the day, maybe like, they’re fine, but like, we wouldn’t hang out. And think about yourself, and the way you act offer give of yourself, interact with that person. And those two different versions of yourself are two different versions, right? And how do you allow that first version to be more and more that time, that version that you live in, lean into being? With people who look like you? Right? And I think that can be a foundational piece and thought exercise that leads you to saying like, well, maybe I would offer this intro? Or maybe I would have said, I’ll give them a shot at you know, going into next stage in my, you know, maybe it maybe I’ll have a follow up meeting with that. Right, or, you know, something right. I don’t think, you know, I don’t think diverse founders or co you know, a colleagues are looking to be gifted anything. I think it’s, it’s really just truly to actually have the same opportunity. And the same access. Right. And, and, and that’s what we’re talking about here. Yeah. Equity. Yeah, exactly.
Matt Hunckler 38:47
Yeah. That’s, that’s really helpful, man. Are there any? You know, you mentioned the title of that post, you know, being that racism is alive and well. Our racism will not die. But that the end was a little bit more positive. Yeah. What is your hope for racism in America or racism in tech? What do you hope to see in terms of behavior change in terms of cultural change? here over the next few years,
Mike Asem 39:24
right, yeah, I mean, my hope is that it’s more than a moment, right? My hope is that the discussion we’re having around the horrific murder of George Floyd and breonna, Taylor, and others write that it’s not just a momentary like, you know, this happened, and now three months from now, we’re not talking about it, and nothing’s really changed, right? Or there’s a bunch of reactive decisions made and appeasement, right. But at the end of the day, that looks a lot more like theater than realistic, you know, you know, impact, right. And so, you know, towards the end of that post, I mean, I think like, you know, I challenge people to think about If this matters to you today, how is that going to be reflected by you in three months? Six months, a year, two years? 10 years, right? You know, if you’re, if you’re a police officer, and this matters to you, but in five years, you’re not going to uphold your fellow police officer accountable. When you see them acting wrongly, then did it really matter to you? Right? If you know if you’re anyone, right? If you’re anyone, if you’re a VC, and, you know, three years from now, you are having your candidate pool for who you hire next to your firm, and it’s 99.9% white men. But what did you really do write in hold, everyone has their own role to play and their own versions of themselves down the line from now to hold themselves accountable to and I believe that there’s opportunity here because I think enough people have sat and thought about it to say they like, you know, I actually want to be a different person, or make a different decision or be making decisions that are impacting on this issue, not just now, but on an ongoing basis.
Matt Hunckler 41:05
Yeah. I 100% agree with that. I hope we see that change as well. And I think I think that’s a huge opportunity. Not just in the Midwest, not just in tech outside of the coasts, but just globally as a whole. And I appreciate you sharing that. Yeah,
Mike Asem 41:27
I mean, I did myself had her was that, although it racism won’t die this year, this could be the year we have a terminal illness, right? Yeah. And that terminal illness is everyone acting today and deciding today, to be that version of themselves on an ongoing basis and holding themselves accountable to
Matt Hunckler 41:46
it? Well, I certainly am going to do my part, at least try to control the thing that I can control the most, which is myself. And I know, I’m not going to do it perfectly. But I want to make sure that this is more than a moment. And we’ve done a lot to kind of change some things internally here at powderkeg. It is something that we’ve really tried to be intentional about at least last several years. And it’s been a big part of the conversation. But I think it’s clear that it needs to be a bigger part of the conversation. And there’s just so much more work to be done. And just a huge opportunity that as we make these changes, it’s just going to be a better, it’s going to be a better world, it’s going to be a better tech environment, it’s going to be a better Midwest. And I look forward to that. And and I look forward to doing the work to make it happen, too. Because it’s going to take all of us doing something. What are their big? I’d like to close on? What are some of the other big opportunities that you’re seeing in Midwest tech right now? And what are you most excited about?
Mike Asem 42:52
Yeah, I mean, look, the the world we’re living in right now is impacted a lot of businesses, right? I think in the future of doing business, and work is forever going to change. I think a fascinating thought exercise is that so many of the traditional venture folks that said, I need to do a deal that’s in my backyard. So I can walk into a board meeting, or I need to have, you know, multiple important meetings before betting on a founder. A lot of them have written checks now virtually never meeting someone face to face in person. Right? That’s crazy. A lot of the people who said this is not possible have said, Now wait, worked out pretty great. So the fact that like, not only can you do a company anywhere, but you can fund a company anywhere, that’s a very interesting dynamic, I would say also, the fact that the Midwest has always had companies that are more capital efficient, and resilient to this type of, you know, cycle or whatever you want to call it. Right? I don’t want to I don’t want to be politically there. But I think we’d be joking ourselves, if we didn’t call it something. You know, you know, as valuations have gone down in the market, you know, by, you know, 30%, or whatever the latest number is, guess what Midwestern companies were already more conservatively valued? As much as 30 to 40%. Anyway, so you do that math, right. I think, I think now is a really interesting moment where in my partner, Victor has written a really interesting series on why the Midwest, it’s a four part series talking about culture, talking about costume business, talking about resources, talking about talent, right? I mean, now’s a really interesting time, especially as you mentioned, coastal employees saying like, well, I could buy way more for a third of the price, living experience. Those same companies are allowed remote work, those same employees may decide to relocate to the Midwest, and who knows, maybe when they’re bored of that larger, larger company, they want to go and start their own or are joining a tech startup here. So I think I think, you know, being bullish on the Midwest has never been a better position to have
Matt Hunckler 44:54
100% Agree, man. How can people in the powderkeg community support you and what you’re doing
Mike Asem 45:00
Yeah, look, I, I love talking to founders, I love being helpful even when we don’t invest. And 25 prides itself on being as founder friendly as we can whether or not you’re part of our portfolio on that. So, you know, please reach out, we’d love to, we’d love to talk to any founders listening and hoping to, to connect with us. And, and yeah, be good stewards of each other, right? I mean, we’re all in this together. I tell people that if you’re in the conversation broadly, anyway, like, you’re probably pretty talented, and you’re gonna be successful. So don’t worry, don’t don’t worry too much, that it’s just this big of people are doing it.
Matt Hunckler 45:36
Awesome, man. Well, I hope a lot more people do get in touch with them. 25 You all are prolific. I know. CrunchBase came out recently with like most active VCs, by state and I think you’re the only VC maybe that had multiple states. So you’re, you’re active and prolific, not just in, you know, the bigger tech hubs like Chicago or? I don’t know. I mean, we’re
Mike Asem 46:05
super proud that most of the portfolio is not in Chicago. We love Chicago. Yeah, Chicago is great. Yeah, we’ve always seen it as a hub and spoke model. And we’re deep on our spokes, right. So you look at some of our best companies. They are. They’re all over the Midwest, so
Matt Hunckler 46:19
yeah, 100%, man. Cool. Thanks. This was great.
Mike Asem 46:22
Absolutely. Thanks, man. Always, always good time.
Matt Hunckler 46:25
You bet. Anything. All right. That’s it for today’s show. Thank you so much for listening. Also, huge thanks to Mike Sam of M 25. Go check him out at m 25 vc.com. And for links to Mike’s social profiles and the other people, companies and resources mentioned in this episode, head on over to powderkeg.com and check out the show notes. If you’d like to discover even more exciting companies stories and strategies to help you reach your full potential. Get the inside scoop with powder kegs hand curated newsletter, The spark delivered to your inbox each week with the tech news and opportunities outside of Silicon Valley that you really need to know. Just go to powder keg.com Sign up right on the homepage. And each Thursday, you’ll get an email directly from me with the most important stories, trends and companies in tech. This newsletter is curated by some of the most connected people in tech hubs between the coasts with insights you’re not going to find anywhere else. So again, that’s powderkeg.com, P O W D, R k, e, g powderkeg. All one word.com. And to be among the first to hear the stories about entrepreneurs, investors and other tech leaders, outside of Silicon Valley, subscribe to us on iTunes at powderkeg.com/itunes. If you’d left us a review while you’re there, I would be forever grateful and if you already have thank you so so much. We’ll catch you next time on The powderkeg podcast.