Our approach
We find the Midwest’s hidden gems, and build them to be acquired.
A catalyst fund for exit-focused investing in companies that are succeeding in the market, have established customers, and are prime candidates for acquisition.
Thesis
There’s a vertical of Midwest startups you’ve never heard of.
They don’t fit traditional unicorn metrics, so they stay under the radar. The Midwest receives a small share of venture capital, which leaves strong, revenue-generating companies overlooked and undervalued. That gap is our opportunity.
- They solve critical challenges for the U.S. industrial baseRecurring, costly problems in legacy industries: outdated tech, siloed data, manual workflows.
- They’re led by capital-efficient foundersDeep domain expertise, demonstrated grit, and coachable.
- They’re ripe for acquisition once they hit the marketProprietary value that integrates well with likely acquirers.
What we look for
What makes a hidden gem.
Proven, sustained growth, in companies that know where they’re headed.
- $5–10M
- in annual revenue
- 70%+
- gross margins
Targets and criteria describe what we look for; they are not guarantees and may change.
- Revenue that evidences product-market fitContracts growing over time.
- Evidence of capital efficiencyA clear pathway to profitability.
- A simple cap tableA reasonably sized round and valuation.
- A coachable founding teamOpen to our advice, yet obstinate enough to stand their ground.
- A strategic boardMembers who roll up their sleeves, not just powerful names.
- Multiple viable exit pathsProviding optionality for success.
Industries
Close to the industries that power the economy.
We prioritize companies solving critical challenges for the industries that support the nation’s economy. It’s no surprise that many of them are based in the Midwest near their customers.
Industries of interest
Industries we avoid
* Why AI infrastructure isn’t a crowded space for us: we don’t back foundational models where capital and competition concentrate. We look for the “picks and shovels” that help critical industries put AI to work, built by teams with deep domain expertise.
Not an exhaustive list.
Our network
A Midwest network, cultivated over decades.
Co-investors, incubators, accelerators, universities, and corporate VCs share opportunities with us directly. Most of our pipeline comes through referrals from that network.
How we work
From first meeting to exit, one partner-integrated process.
Finding deals
- References from our trusted network
- Direct meetings at regional and focused events
Committing funds
- Clear, people-centric communication
- Validating alignment with current and future investors
- Deep diligence on portfolio fit
Building for winning
- Board roles and advisor-partner support
- BlueTree-hosted workshops and introductions to relevant advisors
- Monitoring exit-ready KPIs
Preparing for exit
- Cash-flow planning toward profitability
- CEO workshops on exit planning
- Introductions to our M&A network
Diligence
Disciplined decisions, not fear of missing out.
Our diligence typically follows six stages, with a champion and a resident skeptic assigned to each deal.
- Deal sourcing
- Early diligence
- Team diligence
- Memo drafting
- Investment committee
- Investment