When I began iExplore in 1999, Chicago was referred to as a “flyover city” jokingly, as the big venture money in Boston or Silicon Valley would fly backwards and forwards to one another looking at deals, disregarding Midwest startups entirely. But, that was a different time for Chicago, before it began to build a solid startup ecosystem of its.
Angel investors arranged themselves into systems, like Hyde Park Angels, Cornerstone Angels and Wildcat Angels. Incubators like Sandbox, Lightbank, Tech Nexus, Excelerate Labs, Catapult and 1871 launched to help startups speed up their growth. The local colleges like U-Chicago, Northwestern, Depaul, Loyola, UIC and IIT have done a much better job of formalizing their entrepreneurship programs.
Built In Chicago, the Illinois Technology Association and the Chicagoland Entrepreneurial Center helped to make business networking more accessible for digital tech startups. Venture companies like MK Capital, New World Ventures, Apex Ventures, OCA Ventures, and i2a Fund started to get more intense in their trading, looking at earlier stage deals.
And, let’s not forget about the halo effect Groupon’s meteoric rise experienced, in conditions of placing Chicago on the map in a much bigger way and providing inspiration to the a huge selection of startups that launched in their wake. According to Built In Chicago, 128 digital startups launched in 2011, a 53% increase from 2010 and a 5x increase from the 25 startup average per yr between 2004 to 2008 (before Groupon).
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972MM of which was Groupon). 109MM average per year between 2004 to 2008 (before Groupon). With no symptoms of things slowing in 2012, calendar year to date. Moreover, the coastal VC’s are starting to take notice. And, enough interestingly, the coastal startups are beginning to cherish Chicago also, with many relocating their businesses here to utilize our exploding ecosystem, talent foundation and less expensive of living. Companies like Big Machines, Future Simple, MobCart, StyleSeek, Trunk Club, Vlinks Media and many of the businesses incubated by Excelerate Labs have all relocated from the coasts. Even big companies, like Discovery Communications, have decided to locate their innovation efforts within Chicago, given the exploding startup scene here.
To learn more about why this is going on, let’s take a look at Trunk Club, the non-public shopping site for men’s fashion, led by their successful CEO highly, Brian Spaly, as an incident study. 35MM by Lightspeed, Accel and Nordstrom). When I asked Brian “Why Chicago?”, is what he had to say here.