Startup Guide: Chicago

Startup Guide: Chicago
Compiled by Adam London + Marina Dedes
@al0nd0n // @marinadedes // @lightbank
Photo credit: The Chicago Neighborhood Project

Startup Guide; Chicago

Let’s start with a few quotes to set the tone
I think Chicago could be a great place for building bootstrap companies; longterm companies; companies that are focused on selling stuff – revenues and
proﬁts. That represents the City of Big Shoulders, the Midwest, the whole ethos
here.

- Jason Fried (Founder & CEO 37Signals)

Unlike New York, and its connection to the ﬁnancial sector or Los
Angeles with the entertainment sector, Chicago’s economy is built on
its diversity. That allows us to be a world leader in many different
areas all at once.

- Mayor Rahm Emanuel

There are enough successes now in our community that young entrepreneurs can
look at those successes and say to themselves I can absolutely do it here, I can do
it here in a unique way that I probably couldn't do it on the West Coast, and time to
go, let's do it.

- Brad Keywell


Who we are

Adam
London
@al0nd0n

Associate at Lightbank
Associate at the Boston Consulting
Group
§  Founder: Letters to Success
(education-focused, non-proﬁt) and
@TheLunchRead
§  University of Michigan’s Organizational
Studies Program
§  VentureUP and Chicago Tech
Academy Launch boards
§ 
§ 

Marina
Dedes
@marinadedes

VP at Lightbank
Senior Associate at Duff & Phelps
B.S. Materials Science and
Engineering, University of Illinois at
Urbana-Champaign
§  Chicago Tech Academy’s Launch
Advisory Counsel, 1871 Mentor,
VentureUp
§  Junior Board of Lawrence Hall Youth
Services
§ 
§ 
§


The Table of Contents

A note to start
Over the past decade, the Chicago startup
community has seen incredible growth. More than
ever, it’s possible to build a business anywhere and
Chicago has become a uniquely vibrant tech
community. The Windy City has a phenomenal
combination of talent, experience (larger startups /
corporations), and ﬁnancing and service providers.

We’re often asked (by visiting investors, recent
college graduates, new founders) for advice
navigating the growing Chicago community. This
interest intensiﬁed in recent years with three highly
visible—nearing a billion dollars each—liquidity events
(Groupon, Grubhub, and Braintree).
"
The following is an attempt to write all that
navigational information down. While we tried to be
exhaustive, many wonderful people, companies, and
places will surely be left out. We hope to revisit,
revise, and update the guide as the community
continues to grow.

-Adam and Marina

Startup Guide: Chicago by Section
1) About the
Windy City

A bit of background information on the history
of the city / tech community and the current
state of the market.

2) Who’s
here?

A guide to the startups actively building
businesses here - who they are and where they
work.

3) Where to
start?

A collection of lists highlighting things to know
when getting involved with the community or
starting a business—places to learn,
collaborate, study, and build, etc.

4) How will
we scale?

The angels, VCs, and large companies
(strategic investors, strong corp dev groups,
etc.) who call Chicago home.

Section 1: About the windy city


History of innovation and technology
Many people remember the Great Chicago fire for the destruction it caused. In reality, after
the 1871 fire, architects and entrepreneurs flocked to Chicago to rebuild the city.

Centrally located, the city was a major transportation hub and center of business for
agriculture, trading, and industrial goods companies.

Case Study: Chicago has deep roots in technology

In 1928, the Galvin Manufacturing Corporation (now, Motorola) began making radiorelated products, including the first walkie-talkie and the first commercially successful car
radio. Following the success of the Motorola Radio, the company went public in 1943. In
2012, it was acquired by Google for $12.5b


A community that builds

Chicago has
always built
big
companies

And many
big Chicago
businesses
have roots in
tech

-  Illinois is home to 30+ Fortune 500 companies (4th
behind California, Texas, and New York)
-  Many of those Fortune 500
companies are located in the
heart of downtown Chicago:
‘The City That Works’

{

A few examples…

}


Snapshot of the market

$391m
raised from VCs
and angels in 2012

59 companies
raised >$1m in 2012, a
34% increase over 2011

50+ VC ﬁrms
outside of Chicago invested in local companies

A peak at 2013, a year
of incredible growth.
In Q3 of 2013…

26 acquisitions
Exits

Funding

Built In Chicago’s 2012 Digital Startup Report:
1 IPO

$698m+
from exits with disclosed
dollar amounts

§  39 companies raised $265m, incl. Cleversafe’s $55m Series D
§  44 new startups founded, 4 companies acquired
§  $864m dollars in exits (led by Braintree’s $800m exit to Ebay)
According to Built in Chicago, 367 startups launched in
Chicago in 2012—that’s 1 every 24 hours.
40,000 people work for 1,500+ digital companies in 2013, an increase of
21% over 2012. Mayor Rahm Emanuel wants to double that number.


A link to the Midwest
Often referred to as Silicon Prairie, the Midwest has a booming startup ecosystem. Chicago is located at the
center of many great Midwestern cities committed to growing innovation and technology.

Madison

Milwaukee

Ann Arbor

Minneapolis
Detroit
Omaha
Columbus

Des Moines
Kansas City

St. Louis

A sample view of a few startup friendly funds, co-working spaces,
accelerators, etc. scattered throughout the Midwest…

Cincinnati

Section 2: Who’s here?


A few notable (or, sizable) Chicago companies + exits


A few Chicago companies on the rise (look out for the next exit)
Note: An advantage to being part of a fast-moving industry and quickly growing tech community is that startups
are launched (and gain significant traction) every day. This list is just a glimpse into a few of those companies
that are known to have achieved impressive metrics and / or raised significant financing.


Case studies: Deep dive on a few companies on the rise
Note: We picked two companies to proﬁle so that you wouldn’t have to stare at logos all day. Obviously, we’re
slightly biased and know a few of these better as investors but tried to pull information together only based on
public sources.

§ 
§ 
§ 

§ 
§ 
§ 

Sprout Social was founded in Chicago in 2010 as a, ‘management and engagement
platform for social business’
Software is used by leading international brands, such as: McDonalds and Yahoo!
Series A from Chicago investors (Lightbank), then raised a $10m Series B from NEA

BrightTag was founded in Chicago in 2009 and is a leading marketing technology
platform, allowing brands to connect and act on cross channel customer data
Named one of 2011’s 50 most innovative tech co’s by Venture Wire / Dow Jones
Raised money from local + other investors: Pritzker Group, TomorrowVentures, Baird
Capital, I2A, EPIC Ventures, and Yahoo Japan!


A glimpse at more great teams currently building in the Windy City
Pro-tip: Check out Built in Chicago, Crafted in Chicago, or Crunchbase for
frequently updated lists of Chicago startups.


Where do all these startups work?
Spotlight on: two neighborhoods—River North and the West Loop—with
growing tech communities
§  The stretch of the Brown Line (from Merch Mart
to Chicago) is home to many Chicago startups /
co-working spaces
§  1871, Starter League, Chicago Ventures, and
Motorola Mobility call the Merch Mart home
§  Spot Hero, Trunk Club, and countless others are
spread along the Brown line
§  Groupon, Lightbank, and many early stage co’s
are based out of 600W near the Chicago stop
§  Google announced move
to former cold storage
warehouse by 2015
§  Home to: Threadless,
Sandbox Industries,
Crowdspring

Map courtesy of Built In Chicago

Section 3: Where to start?


Getting to know the community through events
For many folks, events / organizations / meet-ups / etc. function as a great
starting point to understand a community.
The Chicago startup community is powered by, but much larger than, the entrepreneurs and teams
building great products and businesses. The following is a glimpse at a few of the key organizations and
events in the community—a starting spot for those looking for ways to learn more, get involved for the
ﬁrst time, or build deeper relationships in the Windy City à

Events

§ 
§ 
§ 
§ 
§ 
§ 

§ 
Technori Pitch
§ 
Entrepreneurs Unplugged
1871 Chicago Founder Stories
§ 
§ 
TechWeek
§ 
Chicago Ideas Week
§ 
StartupWeekend Chicago

ITA CityLights
§ 
Built In Chicago Launch
§ 
Uncubbed
§ 
Social Media Week
Health 2.0
CUSP

Meet
ups, +
other
groups

§ 
§ 
§ 
§ 
§ 

Chicago Tech Meetup
Tech in Motion
ChicagoRuby
Tech.li
TechCocktail

Built In Chicago
Refresh Chicago
Chicagoland Entrepreneurial Center (CEC)
Illinois Technology Association
Illinois Venture Capital Association

§ 
§ 
§ 
§ 
§ 

Moxie Awards
Momentum Awards
Chicago Innovation Awards


Where to learn (on getting a tech education in Chicago)
So you want to building something? Chicago has an abundance of places / resources to help you out at the
earliest stages – the following is our round-up broken down into phases: 1) Education 2) Ideation 3) Incubation

- Polsky Center for Entrepreneurship and Innovation
- Chicago Innovation Exchange

Tech in
traditional
centers of
education:

- Health, Technology, & Innovation
- Enterprise Works

- UI Labs

- ‘The Garage’
- Innovation Center
- Learn to code, design, and ship web apps at this
beginner-focused software school (ft. classes in: HTML/
CSS, JavaScript, Ruby, Visual design, UX design)

Education

“Where to learn”

- 10 week digital design school focused on UX, visual
design, and front-end development, (HTML/CSS/JS)

New
school
programs:

- ‘Career accelerator’ helping students gain the skills,
mindset, and network to success in startups (ft. tracks in
sales, technical marketing, web dev., product / design)
- ‘Full-time, 8-week iOS bootcamp to start careers as an
iOS developer
- ‘9-week intensive program teaching professional web
development using Ruby on Rails


Where to think (or, a list of great early stage work environments)

Co-working
spaces

Ideation

“Where to think”

A list of some of our favorite, Wiﬁ-providing coffee shops in Chicago.

A more
casual
atmosphere
(aka the
coffee shop)

NextDoor (Lakeview)
Dollop (Multiple)

Heritage General Store (Lakeview)
Buzz Kill

(Wicker Park)

Wormhole (Wicker Park)

Caffe Streets (Wicker Park)

Intelligentsia (Multiple)

Star Lounge (Humbolt Park)


Where to build (early stage incubators and accelerators)

Searching for a Chicago-based incubator to accelerate your
company / idea? Here are a few ideas of local incubators and
accelerators.

Incubation

“Where to build”


Resources to help your company grow (part 1)
Now that you’ve started building a product or business, you might need a bit of help. The
following are a few serviced providers we’ve used at Lightbank.

(Law)

(HR)

(Accounting)

(Insurance)

(Hardware)

And as that business grows, you’ll likely need to ﬁnd (more) talent. In addition to Lightbank’s internal talent
scout, we’ve seen the following agencies recruit employees for strong startups across Chicago.
Tech / Design-centric recruiting

Technology and General recruiting

(We have an in-house talent
team – so if you’re looking for a
job: reach out!)


Resources to help your company grow (part 2)
As you grow, you’ll want to get the word out. Here are a few Chicago-speciﬁc tech publications.

Contact: John Pletz

Contact: Amina Elahi

Contact: James Janega

Contact: Matt Present

And if you need help reaching out to, or strategizing about,
media outreach – here are a few local, tech PR ﬁrms.
Early-stage PR agencies

Later stage (or bigger budget) agencies

Section 3: How to scale?


A non-exhaustive list of Chicago-based sources of capital
Angels

Seed

Series A & B

Growth


There’s more to Chicago than (just) early stage tech ﬁnancing
Here are a few examples—and a lot of logos—of larger local companies with active strategic
funds, business development groups, and corporate development units.

Questions? Additions? Things that we missed?
Reach out à Adam [at] Lightbank + Marina [at] Lightbank



It is hopeless for the occasional visitor to try to
keep up with Chicago—she outgrows his
prophecies faster than he can make them. She is
always a novelty; for she is never the Chicago
you saw when you passed through the last time.
- Mark Twain (Life on the Mississippi)


Sources

Big thanks to the entire Lightbank team* for their help,
thoughts, and feedback.

Also, credit is due to many sources for information used
throughout the presentation, including:

The Chicago Neighborhood Project, Built In Chicago,
Crafted in Chicago, RedRocket Venture Blog, The
Economist, Blackline Review, The Chicago Tribune, and
Fast Company

Startup Guide: Chicago

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