The Secret Founder: How Ecosystems Fail (and what it means for all of us)

The Secret Founder is our way of sharing stories from the frontline of entrepreneurship: the reality of building in the Midwest. It will be a different founder each month to ensure we find all perspectives. This is the first in the series.

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I do love the story we tell ourselves about the startup ecosystems of the Midwest: We lift each other up, we build real things, we don’t chase hype. But the longer I’ve been a founder, the more I’ve learned that there’s the story we tell ourselves… and then there’s the reality on the ground for most of us. 

If there are any guidelines for this reality, as far as I can tell they’re mostly unwritten, and that trips a lot of us up who aren’t yet ‘in the room’.

I’m not sharing my thoughts on this page to dunk on any organization, person, or a single state or city. I’m sharing them because I keep meeting talented founders who are running through the same maze that I am and wondering why the cheese keeps moving. If you recognize your community in this, maybe that’s the point. If you don’t, great. But I’d suggest you try and keep it that way.

Because almost everywhere I look, it’s the same recycled playbook. 

The Illusion of 'Support'

A few thousand dollars here or there in exchange for joining another program, or ‘mandatory’ accelerator so that a local Entrepreneurial Support Organization (ESO) can prove their framework ‘works.’ We’re being used to prop up the image of thriving local ecosystems that, for many of us, actually don’t exist. Or maybe they do… but we don’t get to see or smell them, let alone touch or learn from them. Meanwhile, all of it is often really just about the photo ops and KPIs.

Let’s keep in mind as well that most of the people leading these programs have never actually been founders. But here they are collecting payments while - in my opinion - taking advantage of the lack of knowledge of the very people they’re claiming to help. 

The programming we receive in many of these is often redundant, repetitive, and rarely even helps move the needle for founders. If we ask for real help such as an intro to a potential customer, it usually gets us nowhere… until our struggle threatens the KPIs, that is.

This isn’t just a broken situation. It’s almost extractive by design. The system aims to profit off our resilience, then blames ‘the lack of good founders’ when the math doesn’t work.

Why is this?

Maybe it's because it’s not our ideas they doubt, it’s our ability to execute. As a founder, you learn to recognize the tone of these messages. It’s often actually warm and well-meaning, while deeply paternalistic. There’s a lot of implied pessimism like “venture funding isn’t necessarily for everybody” and “consider whether a lifestyle business makes more sense for you.” But then there are more frameworks to prove that you’re ‘ready,’ and rubrics to quantify your ‘coachability.’ The hoops multiply, while the bar for trust keeps floating out of reach.

Don’t get me wrong, I agree that not everything is venture backable, that not everyone is building something with an outsized market potential and that some may well be better as a lifestyle business . But why not identify that and help us find our ideal lane as soon as possible? Instead, we're funnelled together into programs that may not actually help us achieve our ultimate goal: a business that works.

What I'm saying isn’t anti-learning, by the way. It’s pro-time. Your calendar is your most precious capital in the early days, and this constant treadmill cuts into it. The check sizes are often too small to buy down real risk, but the hours in these programs are also hours spent NOT talking to potential customers.

All of this is exhausting because it forces some who feel left out when they start, to spend energy proving they deserve a door, instead of being helped to find the best one to walk through so that they can start building. Either way, they still need to showcase us to ensure the funding… and their jobs.

All this is happening for some under the most extreme pressures. We’re out here performing miracles while many of us are living in survival mode. Some of us are skipping meals or losing cars and even housing. But we’re still showing up, still building, still believing. And that gets reframed as “grit.”

Incentives, Conflicts, and Scarcity

I happen to know of some advisors, who have essentially been ‘provided’ to entrepreneurs, advocating or helping both sides of a potential business deal. Is it in their financial interest to provide objective, unconflicted advice and advocacy to a small startup? Or ensure what’s best for their established business client? In this situation, how can anyone believe that our best interests are being represented during negotiations or collaboration on pilot projects?

I’ve also been made aware of capital arrangements in our region that don’t look like standard venture terms. You may or may not be aware, but these usually follow a well-accepted framework of small, short term gains in management fees (say 2% of the value invested or funds provided) in return for high potential long-term upside in terms of carry (say 20%). But in some cases in my state, these terms are actually inverted. 

I’m not here to litigate structures, because my concern is more straightforward: if the economics reward program throughput and asset gathering more than founder outcomes and exits, the system will optimize for throughput and assets. Alignment matters. When those controlling crucial capital don’t win ONLY when the founders win, incentives drift, and misalignment compounds.

In my opinion, this is part of the reason why the small, restricted checks keep showing up while decisive capital stays scarce. It’s why the intake process is frictionless while writing a meaningful check is glacial.

A Call to Action for Real Outcomes

I’m not naïve. Systems take time to shift. But there are moves every actor in this story can make that tilt the field toward outcomes and away from theater.

For founders: guard your hours like equity. If a program won’t directly accelerate a revenue milestone, a product milestone, or a decisive capital milestone, then reply with a ‘not now.’ Have the confidence in what you’re doing to make those choices. When you do engage, show up with precise asks: “I’d like an intro to a VP of X at a Y-type company, here’s the expected ROI.” If you think there is a conflict-of-interest, say so. Then ask them for a name within another organization that you can call who can actually open a door. Make them earn their ‘value-add’.

For investors: carve out an earlier tranche that is truly meaningful - a check large enough to hire or ship, not sofa-cushion money. Publish what “yes” looks like at that stage, then say it plainly when it’s a no. Ambiguity burns cycles. And if you are connected to public or quasi-public dollars, pressure-test your incentives in public. If you don’t win when founders win, fix it.

For ESOs: measure what companies measure. Replace attendance KPIs with outcomes: shipped features, signed pilots, recurring revenue, follow-on capital from independent sources, talent hired at livable wages. Let founders opt out of content they’ve clearly mastered. Give staff the air cover to advocate within ethical bounds instead of freezing at the first hint of optics risk. One hour with a buyer who can say yes beats a month of pitch prep for yet another competition.

For policymakers: fund velocity, not theater. Ask the basic questions: who wins if these founders win? How quickly do dollars move from appropriation to bank account? What’s the minimum check size that changes a trajectory? If your answer includes a dozen intermediaries and a year of compliance before a single founder sees a dime, then you’ve probably built a jobs program for administrators, not builders. The best  avenue in my opinion? Fund Midwest startups more often, and support organizations who pocket a portion of that funding and don’t actually support founders, less.

If you’re not a founder… why should any of this matter to you? 

Because isn’t this about the new economies that we all want to see in Indiana, Illinois, Michigan, Minnesota, Ohio, and Wisconsin? One that isn’t like what we see on the coasts? 

This isn’t coastal envy. It’s about some Midwestern standards that aren’t necessarily helpful: risk aversion, attitudes towards money and the possibilities of people. 

We pride ourselves on building things that last here: tractors, turbines, cars, medical devices. In the same way, companies that last require time, money, and trust stacked in the right order. When rules and incentives block that stack, we all lose. If we unblock it, we’re likely to move faster than other places which are addicted to flash, because of the values and work ethic we hold true here.

I haven’t left here yet only because I can’t. Yet. But I would, if I could and I probably will. I’m not the only one. And while I do think some people want it to succeed, I think too many are just in love with playing the game and extracting what works for them, not doing what it takes to help.

So if you’re reading this from an office in Indianapolis or a lab in Madison or a coffee shop in Detroit, here’s the challenge I’d like to put out there: take real bets. Give one of us - the ones you call messy, a little rough around the edges, but with almost unheard of levels of resilience - $1 million and two solid advisors. Watch what happens. 

This way, we can build ecosystems that prove grit really is the secret sauce. I believe the story we keep telling each other about the Midwest can actually be true, but only if we stop exploiting the ‘grit’ of the people we’re claiming to help.