1. Chicago Startup Scene
The City That Works is A Work In
Progress

2. About Jeff Carter
• Partner, West Loop Ventures; Co-Founder Hyde Park Angels
• Born and raised in Chicago
• linkedin.com/in/jeffrey-r-carter
• Independent investor, CME Member for 25 years, former Board
member
• @pointsnfigures (Twitter) Pointsandfigures.com-blog
• Passionate about helping outstanding entrepreneurs turn promising
concepts into market-leading companies.

3. Society is Rapidly Changing
“Startups are transforming our
society. Over the past 100 years,
we’ve gone from an industrial era
to a post information era where
the network is rapidly disrupting
the hierarchy and transforming the
way we work and live.”
-Brad Feld, Foundry Group

4. Unbundling of Industries
“What’s different today is that we are seeing on a daily basis
revolutionary new ideas, devices, and form factors, not evolutionary
enhancements.”-Arvind Sodhani Intel Capital in the WSJ (Jan 1. 2014)
The Megatrends
Networks not Hierarchies
Organizations operate from top down. Software and technology enables them to
be flatter, fleeter, and first.
Everything Will Be Unbundled
Organizations that are generalists will be disintermediated by focused
competitors that engage specialized business silos
Everyone is a Node on the Network
Mobile technology makes everyone a node on the network they operate in. This
has deep ramifications for companies and society
Software is Eating the World
Technological changes are changing the way we produce, interact and transact
enabling flatter, customized chains of distribution and peer to peer networks.

5. Trends In Venture Capital
“Smaller funds with smaller
check sizes were 2-3x more
likely to produce “venture
returns”-greater than a 3x
TVM-than deals in larger
funds.
In our view, small specialist
VC funds are better
positioned to exploit the
current opportunity than
larger VC funds, which often
avoid smaller venture
deals.”-StepStone VC
Research Report, June 2013

6. Small Fund Advantage
Smaller funds (less than $250M) outperform larger funds year after year.

7. Other Leading Funds
Emphasis on Seed and Series A creates a “portfolio of options”.

8. Series A Funding Gap
Series A funding gap is especially acute in the Midwest. There are opportunities to invest in
sustainable, disruptive businesses in the Midwest. Current headline VC funds cannot meet
the need, nor do they have the networks to source deal flow.

9. Chicago is the Hub
Chicago is the hub for
Midwestern startup culture. In
2012, a new startup company
was formed every 48 hours.
Strong in B2B, the Midwest is
poised to ride megatrends and
next waves in innovation.
The Midwest is home to 129 of
the Fortune 500, some of the
largest PE funds and Family
Offices. All represent a deep
pool of potential buyout
partners
In the last five years, there were
$23 Billion worth of exits out of
Chicago and this region- source
“Fast Company”

10. Chicago Ecosystem
• Seminal Moments were around 2005-2009
1. New Venture Challenge-University of Chicago
2. Hyde Park Angels
3. Excelerate Labs which became
4.
5. UI Labs, Matter, Chi. Innovation Mentors
It takes a minimum of 20 years to build a sustaining
ecosystem—be patient; Chicago has a ways to go.

11. Midwest Embracing
Entrepreneurial Movement
•
Top research universities in the “Big Ten” states are under pressure to monetize
resources via startup companies. Some examples:
– Champaign/Urbana (Top tier Engineering and Business, UI Labs, Illinois Launch)
– Chicago Booth, Kellogg , DePaul, Notre Dame(New Venture Challenge, Polsky
Center, Levy Center, Coleman Center)
– Madison (UWisconsin, Gener8tor)
•
Major Midwestern cities are actively encouraging entrepreneurial movements
• Indianapolis/West Lafayette/Bloomington (INpac, SproutBox)
• Emerging start up ecosystems in Minneapolis, Kansas City (Google Fiber), St. Louis,
Ann Arbor, Detroit, Columbus, Cleveland, and Cincinnati
• Virtually every major university in Big Ten country are emphasizing entrepreneurship
programs on campus. Even small schools are embracing the entrepreneurial
movement.

12. Chicago Potential
Where Can Chicago Be Successful as a Startup Power
Player?
1.
2.
3.
4.
5.
6.
7.
8.
Financial Services (ycharts.com)
B2B-Manufacturing, Services (UICO.com, Intellihot.com)
Real Estate (desktimeapp.com, Nextspace.us)
Travel, Logistics, Supply Chain (supply-vision.com)
Healthcare (healthy-txt.com)
Agriculture (farmlogs.com)
Personnel (JuvodHR.com)
Retail (bucketfeet.com)
If we try to be just like Silicon Valley, we will fail.

13. Immediate Challenges
1.
2.
3.
4.
Money-not enough seed stage capital in Chicago
Money-not enough Series A capital in Chicago
Midwestern Sensibility (these are crazy, no money ideas)
Density and Relationships-need more engineers and
entrepreneurial minded people locating here to build
network
5. More Successful Exits-successful companies exiting for big
numbers (Groupon, Braintree, Grubhub)
6. Corporate participation-as customers, investors and as
acquirers
7. Government participation-as customer

14. What Makes A Good
Investment?

15. It’s All About Perspective

16. When Startups Start Out

17. Quick Low Cap Investment
Growth, Stealthy Attacks

18. Would You Have Invested?
• Company turns 140 typewritten characters into a microblog (Twitter initial
description in 2006)
• Delivery service that brings fast food to you (founded 2006 as Grubhub,
IPO in 2014)
• Company that helps online and mobile businesses accept credit card
payments by providing merchant storage, payment gateway (Braintree,
2007, acquired by PayPal for $800M)
• Company that creates memorable experiences for customers and
employees (founded 2012, KapowEvents.com)
• Company that allows strangers to rent a room in your house or apartment
(Airbnb)
• Social network for math and science geeks (founded 2012, Brilliant.org)
• A company that provides free stock market charts (2008, ycharts.com)
• Company that allows hourly workers to change their shift or find extra
work (2010, shiftgig.com)

19. What Can You Do?
1. Become A Customer of A Startup
2. Make an Introduction to a Potential Customer
3. Mentor Entrepreneurs for FREE utilizing
Ohours.org
4. Give Startups FREE Feedback
5. Talk about the local Startup Community with
your friends, neighbors and work associates
6. Invest via an angel group, or local early stage VC
fund

20. If You Love Chicago, Get on
Board