What investors are looking for in Minneapolis (hint: it's not just Minnesota startups)

For this week City Spotlight: MinneapolisI had the honor of interviewing Mary Grovemanaging partner of Bread & Butter Venturesand Justin Kaufenbergmanaging director of Rally Ventures, about their investment strategies. Both are based in Minneapolis and use the city as a watchtower for what is happening in the US.

Those unfamiliar with the Minneapolis ecosystem may scratch their heads and wonder why they shouldn’t be based in the more traditional investment epicenters of the Bay Area, New York or Boston. It may have been true in the past that that’s where most of the opportunities are, but in our interview, Grove and Kaufenberg explain that a lot has changed in the last 10-15 years.

“In the Midwest, in general, and Minnesota in particular, I became obsessed with the opportunities that exist here,” Grove says, “One of the opportunities is the diversity of the economy. We happen to be focused on the three sectors: food technology, digital health and enterprise SaaS, but if you look at the titans of the industry, we have Ecolab, Cargill, General Mills, Mayo Clinic, United Healthcare, Target, Securian, US Bank … I could go on and on. Minnesota is a headquarters economy: we have 57 companies based here that do north of a billion dollars in annual revenue.”

“When we spend time talking to investors on both coasts, more often than not we’re actually talking to them about things like considering opening a sales center or a second office in Minneapolis to take advantage of the local job market,” Kaufenberg says. “Sales talent is an area where we found Minneapolis unmatched. In fact, we have a number of companies on both coasts that have effectively decided to build their entire marketplace sales organization based in Minneapolis. You can get a disproportionate amount of attention here, and it’s much easier to get your fair share of press, to have incredible visibility among prospective employees.”

See the full panel here:

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