Chicago's Growing Startup Scene Driving Jobs & Innovation
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Chicago has grown into a major startup ecosystem, though it still lags behind major tech hubs like Silicon Valley and Boston. The city benefits from a lower cost of living, strong universities, and growing support from investors, incubators, and the government. However, Chicago faces weaknesses in areas like a lack of visibility nationally, shortage of technical talent, and conservative investors seeking more proven models. While Illinois ranks 6th nationally in venture capital funding, Chicago has a long way to go to catch up to leading tech hubs that receive billions more annually in funding.
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Chicago's Growing Startup Scene Driving Jobs & Innovation
- 1. Chicago’s Startup Ecosystem By George Deeb August 12, 2015 @RedRocketVC www.RedRocketVC.com 312-600-7560
- 2. Managing Partner (2010 to Date) Chairman & CEO (2008-2010) Founder & CEO (1999-2008) Investment Banker (1991-1999) BBA-Finance (1987-1991) About George
- 3. About Red Rocket Growth strategy, team and financing for early-stage companies Over 500 companies mentored or consulted to date Authors of “101 Startup Lessons” blog—Over 500,000 reads Contributor to Forbes, Entrepreneur, WSJ, TNW, Alley Watch, etc. Mentors for TechStars, Founder Institute and other startups Investors in FireStarter Fund—17 Portfolio Companies
- 5. Chicago in 2014 Source: Built in Chicago 2014
- 6. Chicago in 2014 Source: Built in Chicago 2014
- 8. Chicago in 2014 Source: Built in Chicago 2014
- 9. Creating Jobs Source: Built in Chicago 2014
- 10. Creating Big Brands Source: Built in Chicago 2014
- 11. Creating High Growth Source: Built in Chicago 2014
- 12. What’s Fueling This? Angel Networks Venture Capitalists Crowdfunding Incubators Universities Corporations Associations Government Service Providers
- 15. Chicago VC’s
- 16. National VC’s
- 22. Services Support
- 23. Chicago Strengths Affordable cost of living—half of the coasts!! A community that really want to help you A large population base for recruiting Leaders committed to seeing ecosystem succeed A growing capital base of angels and VC’s World-class universities pushing entrepreneurship A growing base of serial entrepreneur mentors City and state level support of ecosystem A new startup launching each day in the city!!
- 24. Chicago Weaknesses Conservative investors—high “proof” point Later stage investors—hard to get seed capital Model-driven investors—need solid economics A bias to local industries—heavy B2B focus Not well-known on the national stage Geographic location “an island” vs. coasts A shortage of tech talent Need big & small companies to collaborate better Cheaper to launch means a lot more clutter
- 25. Where Illinois Ranks Nationally Venture Capital Dollars and Deals by State, 2014 Source: National Venture Capital Association/PricewaterhouseCoopers State Deals Amount $ Per Deal Population $ Per Capita Index 1 California 1,804 27,151,513,000$ 15,050,728$ 37,253,956 729$ 1.00 2 Massachusetts 396 4,678,599,700$ 11,814,646$ 6,547,629 715$ 0.98 3 New York 434 4,263,917,000$ 9,824,694$ 19,378,102 220$ 0.30 4 Texas 187 1,506,448,000$ 8,055,872$ 25,145,561 60$ 0.08 5 Washington 113 1,246,773,300$ 11,033,392$ 6,724,540 185$ 0.25 6 Illinois 99 1,069,269,700$ 10,800,704$ 12,830,632 83$ 0.11 7 Florida 45 862,460,900$ 19,165,798$ 18,801,310 46$ 0.06 8 Utah 43 800,996,600$ 18,627,828$ 2,763,885 290$ 0.40 9 Colorado 86 793,054,800$ 9,221,567$ 5,029,196 158$ 0.22 10 Pennsylvania 189 774,665,400$ 4,098,759$ 12,702,379 61$ 0.08 20142014
- 26. Chicago On The Map But a Long Way to Go!! $27B $5B $4B $.8B$1B $.9B $1.5B $.8B $.8B $1B
- 27. Further Reading www.RedRocketVC.com • Chicago’s Startup Ecosystem on Fire • Chicago’s Venture Capital Firms & Angel Networks • Chicago’s Top Startups • Chicago’s Top Startup Lawyers • Chicago’s Top Design & Development Shops • Chicago Top Startup Incubators & Shared Spaces • Chicago or New York for Startups? @RedRocketVC @GeorgeDeeb