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2017
Venture EcosystemFactBook:
Chicago
Credits & ContactPitchBook Data, Inc.
JOHN GABBERT Founder, CEO
ADLEY BOWDEN Vice President,
Market Development & Analysis
ContentGARRETT JAMES BLACK Manager, Custom
Research & Publishing
REILLY HAMMOND Data Analyst
JENNIFER SAM Senior Graphic Designer
Contact PitchBook pitchbook.com
RESEARCH
EDITORIAL
SALES
COPYRIGHT © 2017 by PitchBook Data, Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, and information storage and retrieval systems—without the express written permission of PitchBook Data, Inc. Contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Nothing herein should be construed as any past, current or future recommendation to buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security. This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment.
Introduction 3
Chicago in the US Venture Ecosystem 4
Economy 5
Investment Activity 6-10
Exits & Fundraising 11-12
League Tables 13
The PitchBook PlatformThe data in this report comes from the PitchBook Platform–our
data software for VC, PE and M&A. Contact [email protected]
to request a free trial.
Contents
2 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Well-positioned, yet underserved at the late stageIntroduction
Third in our series of reports focused on exploring US venture ecosystems at a
more granular level, the Chicago FactBook offers multiple contextual datasets
woven together with analysis of the current domestic venture environment.
When it comes to venture capital, analysis can be particularly challenging
given the nature of the model, especially when it comes to quantification of
risk. Moreover, if the past 20 years of financial history have taught us anything,
it’s that overreliance on quantitative methods and modeling can be uniquely
dangerous. Hence our preference for frameworks of analysis that, while
benefiting from quantitative grounding, remain primarily qualitative. One of our
preferred frameworks for analyzing datasets at a certain level of geographic
granularity is that of the ecosystem, wherein the overlapping cycles of
fundraising and investment reinforce each other via key nodes of informational
flow.
Consequently, in the following pages, we trace the evolution of the Chicago
venture scene over the past decade through an ecosystem lens. Especially as
the Chicago venture ecosystem has been growing steadily, it appears to be
approaching a level where, as one venture capitalist put it, local entrepreneurs
may no longer do a “tour of duty” in Silicon Valley before returning. Furthermore,
Chicago’s corporate landscape is intriguing given the role of human capital in
a venture ecosystem. Multiple Fortune 500 companies call the city home, and
yet, likely due to their particular sector, many don’t acquire local startups at an
anticipated clip as of yet. Regardless, the fact senior or high-level employees
and talented individuals in general are readily available has and will continue to
be key. The company you keep matters, after all. With that and recent healthy
fundraising levels, plus continued outside investor interest, Chicago’s VC
ecosystem looks poised for continued growth—barring tail risk—without one
seminal, transformative turning point as of yet.
We welcome your feedback and questions—reach out to us at
[email protected]. I’d like to thank Hyde Park Angels, Origin Ventures,
Adams Street Partners, ARCH Venture Partners, Alex Meyer of HBS Angels
of Chicago, Illinois Venture Capital Association, the Polsky Center for
Entrepreneurship & Innovation, Chicago Ventures, KDWC Ventures, John Pletz,
Hyde Park Venture Partners and the National Venture Capital Association, among
others, all of whom assisted in the production of this report.
GARRETT JAMES BLACK
Manager, Custom Research & Publishing
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3 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Chicago in the US Venture EcosystemSnapshot of Chicago MSA’s size within the US venture ecosystem as a whole
In early August 2016 we released the
first US Venture Ecosystem: FactBook,
the largest PitchBook report ever and
a compendium of venture and relevant
economic datasets for the top 12 (by
overall venture activity) metro areas
within the US. As a recap, we have
reproduced the table ranking the size
Source: PitchBook. *New York and San Jose technically tied but given San Jose’s exit value and VC invested we gave it second place. Note that PitchBook uses the US
Census Bureau definition and delineation of metropolitan statistical areas.
Note: As of 6/30/2016, this ranking was generated by weighting capital raised, VC invested, VC activity and venture-backed exit value equally, tallying up their ranking in each area, then summing and sorting from lowest to highest, with a lower score indicating a larger ecosystem.
MSA*Size of VC ecosystem,
rankedTotal VC funds raised
since 2006Total VC invested since
2010Total # of VC rounds
since 2010Total exit value since 2010
San Francisco #1 $117.6 billion $101.4 billion 9,710 $90.8 billion
San Jose #2 $35.5 billion $43.3 billion 4,152 $63.5 billion
New York #3* $43.6 billion $33.9 billion 6,174 $17.6 billion
Boston #4 $41.2 billion $30.7 billion 3,664 $28.7 billion
Los Angeles #5 $2.7 billion $21.3 billion 3,403 $11.2 billion
Seattle #6 $7.6 billion $8.4 billion 1,717 $6.7 billion
Chicago #7 $3.4 billion $8.3 billion 1,348 $9.95 billion
Washington, DC #8 $4.8 billion $8.2 billion 1,416 $7.4 billion
San Diego #9 $1.5 billion $9.4 billion 1,317 $8.7 billion
Austin #10 $1.9 billion $6.6 billion 1,376 $3.7 billion
Philadelphia #11 $3.0 billion $4.8 billion 1,003 $5.4 billion
Atlanta #12 $1.15 billion $5.0 billion 837 $7.8 billion
#1
#2
#1
#3
#4
#5
#6
#7
#8
#9
#10
#11
#12
#1 #1
#2
#2 #2#4
#3
#5
#6
#7
#8
#9
#10
#11
#12
#3
#4
#5
#7
#8
#6
#9
#10
#11
#12
#4
#3
#5
#6
#7
#10
#9
#12
#11
#8
of the 12 venture ecosystems below, to
provide some context for how Chicago
stacks up. The most striking thing at
the outset is that Chicago, despite
its overall size, is in the middle of the
rankings. There are many reasons for
that result, ranging from historical to
geographic. As with any ranking that
could be prone to raising hackles, it
is critical to note that size does not
correlate with health. Moreover, the
Bay Area and Valley predominate
to such a degree that it is clear the
VC industry currently remains highly
concentrated.
4 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Relatively healthyChicago’s current economic condition & recent trends
Chicago contrasts with Illinois as a
whole when it comes to economic
growth. Cook and Collar counties
accounted for close to 87% of
private-sector jobs added in the state
since the depths of the recession.
Especially as they pertain to the
entrepreneurial/startup ecosystem,
most statistics point to relative health
in Chicago, with sentiment waxing
positive among employers and income
growing slightly faster than prices.
One negative statistic in the table to
the right testifies to one of the likely
reasons recent CBRE research ranked
Chicago 13th in terms of tech-talent
market health in North America: The
population of millennials declined by
5% between 2009 and 2015. (That
migration resembles Illinois’s, with
114,000 lost to domestic migration
against a total population of 12.9
million, the highest rate in the region.)
13th out of 50 is still more than
healthy, and, moreover, Chicago is still
relatively much cheaper to operate in
than many other large markets, and
as a consequence of its size remains
remarkably diverse. Moreover, multiple
large businesses have been moving
their headquarters to the city—ADM,
Conagra Brands, Caterpillar—although
that signals more in terms of business
appeal than increased employee
counts. All in all, the Chicago economic
scene is a welcoming environment
without being a blockbuster growth
success. One potential area of concern
noted during the course of background
research was pending Illinois House
Bill 3393, which would levy a 20%
tax on fees earned from investment
management. Should a comparable
federal bill pass, the measure will cease
to exist1.
1 Note: Per the Illinois Venture
Chicago metropolitan statistical area (MSA)Select
statistics
Civilian labor force, March 2017 3.7 million
College students per 1,000 residents, 2015 74.2
Population growth, Cook County, July ‘16-July ‘17 -0.41%
Employment growth, March ‘16-March ‘17 0.8%
Change in unemployment rates, not seasonally adjustedMarch ‘16-March ‘17
-1.8%
Compensation cost change, 12-month, not seasonally adjusted, March ‘16-March ‘17
2.5%
Wages & salaries change, 12-month, not seasonally adjusted, March ‘16-March ‘17
2.7%
Approximate range of change in annual fair market rents, 1-4 bedrooms, FY 2016-FY 2017
4.8%-5.5%
Consumer price index (urban) annual percentage change, March 2017 2.0%
2017 ranking for startup activity, 2017 ranking for entrepreneurial growth 31, 30
S&P/Case-Shiller IL-Chicago Home Price Index, February 2017 140.87
Job growth ranking among top 200 MSAs from 2010-2015, 2016 88
Employer confidence increase, 2Q 2016-2Q 2017 7%
Year-over-year percentage change in business barometerMarch ‘16-March ‘17
7.6%
Current-dollar GDP, 2015 $641 billion
One-year change in Zillow Home Value Index, one-year forecast 6.4%, 2.6%
Sources: US Bureau of Labor Statistics, HUD FY 2017 Fair Market Rents, PayScale, Brookings Institution,
US Bureau of Economic Analysis, The Kauffman Index, Illinois Science & Technology Coalition, The
Milken Institute Center for Jobs & Human Capital, Federal Reserve Bank of St. Louis, Society for Human
Resource Management, World Business Chicago, Zillow, CBRE (Hyde Park Angels’ analysis)
According to analysis by Hyde Park Angels, it costs tech firms approximately 42% more to operate in San Francisco than it does in Chicago.
Capital Association, HB3393 did not end up moving forward but a comparable bill SB1719 recently was passed by the Senate and is currently assigned to the Revenue & Finance Committee in the House. IVCA notes that SB1719 is not tied to any federal measure, unlike HB3393. Further details are available here.
5 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Quarterly momentum has been subsiding
Chicago MSA venture activity
Source: PitchBook. *As of 4/30/2017
VC invested remains on pace relative to historical totals
Chicago MSA venture activity
A gentle, temporary pullbackAn overview of Chicago’s venture investment activity
Amid a general decline in VC
transaction volume driven by a slide
in early-stage deals nationwide,
Chicago could prove different
From a cyclical standpoint, the
nationwide backdrop of subsiding
venture financing volume suggests we
are merely in the investing cycle’s later
stages, particularly as VC invested,
median deal sizes and post-valuations
remain substantial. On a yearly basis,
therefore, Chicago’s relative health
stands out considerably, as both VC
invested and deal volume were steady
from 2015 to 2016. Although quarterly
figures indicate a decided slackening
of momentum as of late, it is especially
critical to note that it takes a long time
to build a venture ecosystem, so the
robust increase in venture funding over
the past decade is the more important
point to highlight. Given the level of
dataset granularity, temporality plays a
more significant role as well.
$457
$478
$921
$254 $1
,079
$2,0
55
$790
$708
$1,4
94
$1,3
27
$1,2
78
$335
65 6485
53
124
165
200 230
274
239240
51
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($M)
# of Deals Closed
13
0
10
20
30
40
50
60
70
80
90
$0.0
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
$1,400.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($M) # of Deals Closed
Source: PitchBook. *As of 4/30/2017
6 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
The “Midwest discount” still helps soften any potential
inflation given the scaling venture scene
Median venture financing size ($M) in Chicago MSA
Late-stage outliers can still propel numbers high,
though as sample sizes grow figures should correct
Median venture post-valuation ($M), Chicago MSA
Lower costs of doing business still
help mute deal metrics’ inflation, with
a few notable outliers
It’s simply cheaper for venture-backed
startups to operate in Chicago, in a
manifestation of the region’s generally
lower costs dubbed “the Midwest
discount”. Accordingly, median figures
for deal size and valuations can remain
less inflated than those observed on
the coasts—although outliers at the
late stage still exist, as is evident from
the charts below, and steady increases
over the past few years were certainly
recorded. Important consequences
can ensue: Capital efficiency can be
greater at times; vastly accelerated
ramp-ups can be somewhat hampered,
particularly when it comes to obtaining
specialized talent in some segments;
and syndication is often necessary for
some of the larger early-stage rounds.
On an anecdotal basis, however, the
collaborative nature of Chicago VC is
still largely intact. A note regarding
the follow-on case study below: The
extent to which that seeded cohort
of 2010 garnered follow-on rounds is
testament to a healthy progression
up the capital stack, though skewed
by the few, most successful repeat
fundraisers.
Source: PitchBook. *As of 4/30/2017
$0.8$1.4
$4.7 $4.7
$7.2
$11.0
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
2010 2011 2012 2013 2014 2015 2016 2017*
Angel/Seed Early-stage VC Late-stage VC
Source: PitchBook. *As of 4/30/2017
$6.0 $8.0$19.6
$37.5
$54.5
$143.8
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
2010 2011 2012 2013 2014 2015 2016 2017*
Angel/Seed Early-stage VC
Late-stage VC
Median venture financing size ($M) in Chicago MSA by
early-stage series
$0.8$1.1**
$4.1$4.7**
$8.6
$5.1**
$0
$2
$4
$6
$8
$10
$12
$14
$16
2010 2011 2012 2013 2014 2015 2016 2017*
Angel/Seed Series A Series B
Source: PitchBook. *As of 4/30/2017
**Indicates small sample size so not statistically significant as of yet.
Case study: Tracking Chicago MSA-headquartered
companies seeded in 2010 and follow-on financing
rates by company count & financing type
0%
5%
10%
15%
20%
25%
30%
0
1
2
3
4
5
2011 2012 2013 2014 2015 2016
Late Stage
Early Stage
C
B
A
Seed
Angel
% of ini�al cohort receivingfollow-on funding
Source: PitchBook. *As of 4/30/2017. In cases where the precise series of
the financing is unknown, the stage is labeled instead.
7 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Chicago MSA VC activity (#) by round size Chicago MSA VC activity ($M) by round size
With no sign of slowing, considerable
efforts support the startup
environment
Incubators and accelerators such
as 1871 Chicago, the Polsky Center
and Lightbank remain active in
encouraging local entrepreneurs.
Different data providers on overall
startup activity paint somewhat
different pictures, with Kauffman
ranking the Chicago MSA as 31st out of
the 40 largest US metro areas.
Source: PitchBook. *As of 4/30/2017Source: PitchBook. *As of 4/30/2017
0
50
100
150
200
250
2010 2011 2012 2013 2014 2015 2016 2017*
Under $500K $500K-$1M
$1M-$5M
$5M-$10M
$10M-$25M
$25M+
$0
$500
$1,000
$1,500
$2,000
$2,500
2010 2011 2012 2013 2014 2015 2016 2017*
Under $500K $500K-$1M
$1M-$5M $5M-$10M
$10M-$25M $25M+
Startups with founders affiliated with University of Chicago by academic
year of founding
24
36
61
42
91
14
22
26
4
6
0 10 20 30 40 50 60 70 80 90 100
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
# of inac�ve/acquired/non-ac�ve
# of startups
Source: Polsky Center for
Entrepreneurship & Innovation
Seed corrected between in 2015 from a peak, now is
steady
Chicago MSA VC activity (#) by series
A surge last year in Series A VC invested portends
subsequent raises
Chicago MSA VC activity ($) by series
Source: PitchBook. *As of 4/30/2017 Source: PitchBook. *As of 4/30/2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*
Seed Series A Series B Series C Series D+
0
20
40
60
80
100
120
140
160
180
2010 2011 2012 2013 2014 2015 2016 2017*
Seed Series A Series B Series C Series D+
8 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Due in part to fixed costs, software predominates
Chicago MSA VC activity (#) by sector
A plurality of VC is invested in software
Chicago MSA VC activity ($) by sector
Source: PitchBook. *As of 4/30/2017
A steady if slow decline since 2012
First-time financings in Chicago MSA
The city itself attracts most activity
City of Chicago-only venture activity
$103
$198
$173
$108
$213
$138
$120
$34
56
68
109101
96
86
78
8
2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($M)
# of Deals Closed
$451
$1,5
05
$377
$609
$1,0
92
$1,0
45
$1,0
35
$266
89
125
156
191
210
178
187
44
2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($M) # of Deals Closed
Source: PitchBook. *As of 4/30/2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% So�ware
Pharma & Biotech
Other
Media
IT Hardware
HC Services & Systems
HC Devices & Supplies
Energy
Consumer Goods &Recrea�onCommercial Services
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% So�ware
Pharma & Biotech
Other
Media
IT Hardware
HC Services & Systems
HC Devices & Supplies
Energy
Consumer Goods &Recrea�onCommercial Services
Source: PitchBook. *As of 4/30/2017Source: PitchBook. *As of 4/30/2017
The Illinois Science & Technology
Coalition notes that according to their
survey in the Illinois Innovation Index,
state universities produced more than
800 startups from 2012 to 2016, nearly
100% more than recorded from 2009
to 2013. Contrasting that statistic
with diminishing first-time financing
flow in the Chicago MSA, it’s clear a
mild decline in the volume of rounds
of the smallest size categories may
have contributed to the decline. As
risk heightened in tandem with even
gently elevating median financing
sizes, those first-time checks were
written less frequently. As confirmed
during background research, some
of the fledgling VC funds that initially
targeted smaller, local businesses
have experienced subsequent success
and consequently raised larger funds,
targeting Series A more explicitly.
Does sector diversity help or hinder?
Chicago’s sector diversity and sheer
size are oft-noted in contrast to the
fact its venture ecosystem is smaller
than that of, say, Seattle. The diversity
can prove useful in terms of recruiting
talent in certain areas such as sales,
yet what Chicago’s diversity does not
lend itself to is a prevailing narrative
centered on the strength of its tech
sector. Chicago is not necessarily
9 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Investment (#) by size in Chicago MSA-based
companies with participation from investors HQ’d
outside Illinois
Investment (#) by size in Chicago MSA-based
companies with participation from investors HQ’d
outside Illinois
Investment in Chicago MSA-based companies with participation from
investors HQ’d outside Illinois
thought of as a tech city, and such
narratives do matter when it comes to
retention rates of local talent, among
other issues. The probability that a
senior software engineer will up and
move to Chicago to take a job at a
startup is potentially lower should
they perceive the chances of obtaining
other, similar jobs to be slim. That
said, the growth of Chicago’s venture
ecosystem and promising state of its
early-stage scene in particular hint
strongly it is more a matter of time
before this perception changes, as the
robustness of entrepreneurial efforts
continue amid the relative health
of Chicago’s economy. Meanwhile,
the talent pipeline is certainly still
flowing strongly, simply due to the
concentration of local universities.
Outside investors still critical to
underserved late-stage market
Select funds such as Pritzker Group
Venture Capital and Adams Street
Partners remain some of the few
players in the late-stage venture
scene. More coastal funds have been
increasing their presence, helping
plug the gap, as it were, at what
some called the locally underserved
late-stage market. (On an anecdotal
basis, some related they believed the
general startup market in Chicago
to be underserved, which could well
be the case in some pockets of the
entrepreneurial scene given overall
startup volume, but in our opinion
remains yet to be clearly established
given the advent of multiple early-
stage funds in the past few years.)
Hence the preponderance of VC
invested in larger rounds, although
since 2014 outside firms have also
been driving rounds in the middle of
the capital stack.
$763
$732
$487
$339
$998
$602
$757
$214
87
103
119
144
182
161 158
33
2010 2011 2012 2013 2014 2015 2016 2017*
Deal Value ($M)
# of Deals Closed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*
Under $500K $500K-$1M $1M-$5M
$5M-$10M $10M-$25M $25M+
Source: PitchBook.
*As of 4/30/2017
Source: PitchBook. *As of 4/30/2017 Source: PitchBook. *As of 4/30/2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*
Under $500K $500K-$1M $1M-$5M
$5M-$10M $10M-$25M $25M+
10 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Strong foundationsDatasets of venture-backed exits and local venture fundraising in Chicago
Sustained decade highs in exits helped lead to recent fundraising success
Venture-backed exits of Chicago MSA-based companies
Interestingly, PE buyers have provided significant
liquidity in the past
Venture-backed exits ($) by type of Chicago MSA-
based companies
Unsurprisingly, corporate buyers dominate the listings
Venture-backed exits (#) by type of Chicago MSA-
based companies
Recent exit volume lays groundwork
for future recycling of talent & capital
A key point for the Chicago VC
ecosystem has been the recycling
of both human and financial capital,
after a handful of hefty exits. Groupon
cofounders Eric Lefkofsky and Brad
Keywell—whom also began VC firm
Lightbank—are perhaps the best-
known examples. Yet given high-
profile, sizable sales such as those of
CleverSafe or Fieldglass, the pipeline
of employees that cashed out or may
cash out sooner rather than later could
nurture a greater incidence of repeat
entrepreneurs, much like Chris Gladwin
of Cleversafe, who recently headed
up a new enterprise called Ocient. The
timeline for such a trend is elongated,
hence the impact of earlier successes
has been crucial. Local boosters always
long for a truly massive success story,
yet the role played by what some
would consider more modest exits
can’t be discounted.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*Acquisi�on Buyout IPO
Source: PitchBook. *As of 4/30/2017. Note: Aggregate exit post-valuations are included to better
represent the total value created by IPOs in particular. They include IPO post-valuations, which are
calculated as total shares outstanding multiplied by offering share price.
Source: PitchBook. *As of 4/30/2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*Acquisi�on Buyout IPO
Source: PitchBook. *As of 4/30/2017
$1,0
71.2
$13,
480.
7
$873
.7
$3,2
14.2
$1,2
63.6 $4
,166
.5
$889
.2
$43.
0
16
12
1921
18
26
24
4
2010 2011 2012 2013 2014 2015 2016 2017*
Aggregate Exit Postvalua�on ($M)
# of Exits Closed
11 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Total AUM resurges to new high after a decline owing
in part to exits ramping up
VC AUM in Chicago MSA
The majority of exits remain on the larger side
Venture-backed exits of Chicago MSA-based
companies (#) by size
Significant push in 2016 helped lay foundation for next investing cycle
Chicago MSA venture fundraising
A bevy of recently closed early-stage-
focused funds bodes well for the
future, even if the late-stage market
remains underserved purely on a
domestic basis
With no fewer than 10 venture funds
closed since the start of 2016 through
the end of April 2017, there is plenty
of accumulated capital waiting to
be deployed. Especially given the
range of fund sizes—Origin Ventures’
fourth, $80 million vehicle or the $66
million Chicago Ventures Fund II, for
example—the early-stage market
in Chicago is set to be well-funded.
When it comes to higher-priced
segments of the capital stack, there
simply aren’t that many large, local
players. However, as long as outside
investor interest remains active—on
quantitative and anecdotal bases it
looks set to stay robust—there remains
only to source for late-stage capital
further abroad. It took decades to
build Silicon Valley, after all—perhaps
local firms in the Chicago MSA will
raise hundreds of millions for funds in
the future, but for now, the ecosystem
is still growing steadily toward that
level.
$202
$413
$830
$88
$17
$628
$75
$230
$411
$326
$666
$95
5
4
8
5
3
9 9 9
5
8 8
2
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
Capital Raised ($B) # of Funds Closed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017*
Under $25M $25M-$50M $50M-$100M $100M-$500M
Source: PitchBook. *As of 4/30/2017
Source: PitchBook. *As of 4/30/2017
$3.2
$3.4
$3.6
$3.8
$4.0
$4.2
$4.4
2010 2011 2012 2013 2014 2015 2016
Total AUM ($B)
Source: PitchBook. *As of 4/30/2017
Under 1x
1-2x 2-3x 3-5x 5-10x 10-15x 15-20x 20-25x 25-30x
19% 12% 9% 9% 19% 14% 7% 9% 2%
A hefty portion of Chicago exits commanded significant MOICs
Percentage of Chicago exits separated by multiple on invested
capital (MOIC), 2007-2017*
Source: PitchBook. *As of 4/30/2017. This table recreated and updated the same
methodology as used in this article, excepting the inclusion of buyouts in this dataset.
https://pitchbook.com/news/articles/which-us-cities-generate-the-best-vc-returns
12 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
Hyde Park Angels 20
Chicago Ventures 12
Hyde Park Venture Partners 12
M25 Group 11
Service Provider Capital 9
HBS Angels of Chicago 8
Pritzker Group Venture Capital
7
Bluestein & Associates 7
Wasson Enterprise 5
Bridge Investments 5
Matter 5
Most active investors in Chicago MSA,
2016, across all stages
Venture capitalVenture capital, for the purposes of this report, is defined as institutional investors that have raised a fund structured as a limited
partnership from a group of accredited investors, or a corporate entity making venture capital investments.
ValuationsPre-money valuation: the valuation of a company prior to the round of investment. Post-money valuation: the valuation of a company
following an investment.
Exits
This report includes both full and partial exits via mergers and acquisitions, private equity buyouts and IPOs.
FundraisingThis report includes Chicago MSA-based venture capital funds that have held a final close. Funds-of-funds and secondary funds are
not included.
League tables are compiled using the number of completed VC rounds for Chicago MSA or Chicago-based companies in 2016. To ensure your firm is accurately represented in future PitchBook reports, please contact [email protected].
Source: PitchBook
CompanyDeal size
($M)Series/stage Sector
SpringCM $25.0 Series EAutomation/Workflow
Software
CloudCraze $20.0 Late stageBusiness/Productivity
Software
Jellyvision $20.0 Late stage Human Capital Services
Shiftgig $20.0 Series CMedia and Information
Services (B2B)
Aquilon Energy Services $19.0 Series B Database Software
Pangea $11.6 Series B Financial Software
Strategic Internet Marketing Partners
$5.0 Late stage Application Software
Jiobit $4.8 SeedWireless Communications
Equipment
Maestro Health $4.0 Series A Life and Health Insurance
Tovala $3.7 Early stage Social/Platform Software
Pak'd $3.3 Angel Food Products
OVAL Fire Products $3.2 Series B Commercial Products
Source: PitchBook
Select League TablesSelect rankings of most active investors and deals in Chicago
Select 1Q 2017 venture financings of companies headquartered in Chicago
Most recent round type
9-12 months
12-18 months
18-24 months
Angel/seed 19 55 47
A 14 20 13
B 4 12 7
Ready for the next round: companies
(#) by time since most recent round
Source: PitchBook. *As of 4/30/2017
13 PITCHBOOK 2017 VENTURE ECOSYSTEM FACTBOOK: CHICAGO
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