The Exchanges

Q So, so what's the mission with Chicago Ventures? What's your average ticket size? What sectors do you specifically like? What's the kind of overall, uh, methodology of Chicago Ventures?

A Totally. So we are, I mean, we're a startup ourselves. Um, like a lot of the micro VC funds out there, we're only three and a half years old. We were, um, started in December of 2011. Um, and so the first fund was forty million dollars. Um, we made 39 investments out of that fund. Average ticket size, like first check-in, around 500,000 dollars, maybe slightly under that. And, and the basic thesis of the fund is that there is a lot of Untapped talent and resources in the Midwest. And while it may be slightly counterintuitive, what a lot of people don't realize is that a third of the entire Fortune 500 is right here in the Midwest. People who are literally in our backyard. So in the same way that, you know, um, a Silicon Valley VC is regularly hanging out with executives from Salesforce and Dropbox and, you know, Zendesk or whatever it is, I'm regularly hanging out with executives from Walgreens and Allstate and Places like that, right? So it provides a huge amount of value for companies that are looking to sell into the Fortune 500. That's kind of how, that's kind of one way we kind of focus. The other way is that Chicago is actually really an extraordinary consumer market, which is where I spend a lot of my time. If you look at, um, even like a lot of the on-demand companies lately, Sprig, as its second market chose Chicago, Managed by Q, as its second market chose Chicago. If…

AI assessment note: “Average ticket size, like first check-in, around 500,000 dollars, maybe slightly under that.”

Q Now, I'm really curious to hear about how you got into the technology industry and then made your transition into the world of venture capital. Can you share that with us?

A Yeah. Um, so I'll try to go as quickly as I can. I know you've got a lot to pack into 20 minutes, but, um, but so from, uh, I guess from a very young age, I taught myself, uh, visual basic. Like, I taught myself how to code when I was maybe eight or nine years old, and I taught myself HTML when I was 10 or 11. So my parents got me a computer at a very young age. I was always begging them for a laptop. They wouldn't give me a laptop, but, um, so I had to use the family computer, but I was just kind of obsessive. Um, and so, um, I did that from a very, very young age. So I did my first startup when I was, like, 12 called getaccess.com. I was just a rebundler of services, and I was, like, a reseller. Um, and during the dot-com bust, um, a lot of those services that I had pre-sold went, like, bankrupt and belly up, and I just couldn't service my customers. So that company didn't work out. But just overall, I've always loved technology. Um, so, um, Actually, so when I moved to New York City at age 17 to go to NYU, I, um, I had been connected with a marketing agency called Buzz Marketing Group, and they were doing a lot of, like, work with kind of online communities and forums for big clients like Sony, Verizon, and a few others, and so they basically hired me, even though I was just a freshman in college at the time, to be their director of interactive marketing, so I worked full-ti…

AI assessment note: “from a very young age, I taught myself, uh, visual basic.”

Q So, so what's the mission with Chicago Ventures? What's your average ticket size? What sectors do you specifically like? What's the kind of overall, uh, methodology of Chicago Ventures?

A Totally. So we are, I mean, we're a startup ourselves. Um, like a lot of the micro VC funds out there, we're only three and a half years old. We were, um, started in December of 2011. Um, and so the first fund was forty million dollars. Um, we made 39 investments out of that fund. Average ticket size, like first check-in, around 500,000 dollars, maybe slightly under that. And, and the basic thesis of the fund is that there is a lot of Untapped talent and resources in the Midwest. And while it may be slightly counterintuitive, what a lot of people don't realize is that a third of the entire Fortune 500 is right here in the Midwest. People who are literally in our backyard. So in the same way that, you know, um, a Silicon Valley VC is regularly hanging out with executives from Salesforce and Dropbox and, you know, Zendesk or whatever it is, I'm regularly hanging out with executives from Walgreens and Allstate and Places like that, right? So it provides a huge amount of value for companies that are looking to sell into the Fortune 500. That's kind of how, that's kind of one way we kind of focus. The other way is that Chicago is actually really an extraordinary consumer market, which is where I spend a lot of my time. If you look at, um, even like a lot of the on-demand companies lately, Sprig, as its second market chose Chicago, Managed by Q, as its second market chose Chicago. If…

AI assessment note: “Average ticket size, like first check-in, around 500,000 dollars”

Q And how important do you think proximity is to your investments as VCs? And for startups, maybe contemplating, uh, having VCs from abroad or from far off, how important is a close proximity?

A We think it's pretty important to be in touch regularly with our companies. Um, I think, you know, listen, I, I go to LA to visit our, you know, investments there a couple of times a year, but again, you know, for, for kind of our investments in SF for LA, we're traditionally not the lead investor, um, because we do like to lead that, leave that to someone who is a little bit closer, can be a little bit more hands-on. Again, I text message with those founders on a daily basis. It's not about communication, but, There is something to be said for being very close. So the majority of investments that we lead are based here in the Midwest.

AI assessment note: “majority of investments that we lead are based here in the Midwest”

Q And talking of kind of marketplaces and hot sectors, we often hear about the rise of food tech, and, you know, often Instacart's latest enormous rounds come out. Where do you sit on the integration of tech and food, and what do you think is driving this sudden trend?

A Yeah, so good question. So we've made a few investments in food, and then I've personally made a couple of angel investments in food tech as well. Um, you were right. It is extraordinarily difficult, but it's attractive because it's basically a trillion dollar space. Um, and remember, we spoke about frequency before. It's one where you, where you do need to eat three times a day every day for the rest of your life. So it is conceivable, theoretical again, but conceivable that you could build a platform where someone would purchase on it Three times a day, every day for the rest of their life, right? So we've got Grubhub here in Chicago and, and, um, you know, we're very close with, with the team there. You know, I think that's their, one of their goals is, you know, can we have customers purchase from us three times a day, every day for the rest of their lives, right? So, um, it's, you know, that's kind of like the holy grail, right? Massive trillion dollar space and a huge amount of engagement. So I think that you're, you, you nailed it as kind of why it is so interesting. Um, I think that there's one other aspect, which, um, Uh, which also comes into play, which is that there's kind of being amongst, you know, our generation, there is an entire reimagination or, or changing expectation of what food looks like, um, how it's developed, what level of transparency there is behind…

AI assessment note: “Massive trillion dollar space and a huge amount of engagement.”

Q And how important do you think proximity is to your investments as VCs? And for startups, maybe contemplating, uh, having VCs from abroad or from far off, how important is a close proximity?

A We think it's pretty important to be in touch regularly with our companies. Um, I think, you know, listen, I, I go to LA to visit our, you know, investments there a couple of times a year, but again, you know, for, for kind of our investments in SF for LA, we're traditionally not the lead investor, um, because we do like to lead that, leave that to someone who is a little bit closer, can be a little bit more hands-on. Again, I text message with those founders on a daily basis. It's not about communication, but, There is something to be said for being very close. So the majority of investments that we lead are based here in the Midwest.

AI assessment note: “leave that to someone who is a little bit closer, can be a little bit”

Q And talking of kind of marketplaces and hot sectors, we often hear about the rise of food tech, and, you know, often Instacart's latest enormous rounds come out. Where do you sit on the integration of tech and food, and what do you think is driving this sudden trend?

A Yeah, so good question. So we've made a few investments in food, and then I've personally made a couple of angel investments in food tech as well. Um, you were right. It is extraordinarily difficult, but it's attractive because it's basically a trillion dollar space. Um, and remember, we spoke about frequency before. It's one where you, where you do need to eat three times a day every day for the rest of your life. So it is conceivable, theoretical again, but conceivable that you could build a platform where someone would purchase on it Three times a day, every day for the rest of their life, right? So we've got Grubhub here in Chicago and, and, um, you know, we're very close with, with the team there. You know, I think that's their, one of their goals is, you know, can we have customers purchase from us three times a day, every day for the rest of their lives, right? So, um, it's, you know, that's kind of like the holy grail, right? Massive trillion dollar space and a huge amount of engagement. So I think that you're, you, you nailed it as kind of why it is so interesting. Um, I think that there's one other aspect, which, um, Uh, which also comes into play, which is that there's kind of being amongst, you know, our generation, there is an entire reimagination or, or changing expectation of what food looks like, um, how it's developed, what level of transparency there is behind…

AI assessment note: “it's attractive because it's basically a trillion dollar space”

Q And with marketplaces, do you ever get concerned by the potential imbalance in supplier to demand?

A Yeah, I mean, you know, I think that's always a concern, and, um, I think that's just a, a much larger conversation where, you know, you really need to invest in, um, founders who are very much focused on their customers, and in the case of the marketplace, whether it's two or three-sided, you have either two sets of customers or three sets of customers, and it, and it's, you know, just having a really good sense of, are they happy? Are they being driven enough business? Are the economics good enough for your purchasers? Whatever it is, So I'd say that, yeah, I mean, obviously, you know, chicken and egg is always something you need to be, um, you know, concerned of, but, you know, you invest in the right people who are completely obsessive about keeping their customers happy, and I think it, you know, they'll figure it out.

AI assessment note: “I think that's always a concern, and, um, I think that's just a, a much larger conversation”

Q And with marketplaces, do you ever get concerned by the potential imbalance in supplier to demand?

A Yeah, I mean, you know, I think that's always a concern, and, um, I think that's just a, a much larger conversation where, you know, you really need to invest in, um, founders who are very much focused on their customers, and in the case of the marketplace, whether it's two or three-sided, you have either two sets of customers or three sets of customers, and it, and it's, you know, just having a really good sense of, are they happy? Are they being driven enough business? Are the economics good enough for your purchasers? Whatever it is, So I'd say that, yeah, I mean, obviously, you know, chicken and egg is always something you need to be, um, you know, concerned of, but, you know, you invest in the right people who are completely obsessive about keeping their customers happy, and I think it, you know, they'll figure it out.

AI assessment note: “Yeah, I mean, you know, I think that's always a concern”

Q Okay, how do you measure your success as a VC?

A That's a good question. So, you know, the truth is I've only been in this business for three and a half years, so, um, and it's the greatest bull market in the history of, you know, basically the history of the world. So to measure it only on a returns basis would both be, um, you know, inadequate as well as I'd just be lying to myself because it's, you know, like, you know, it's just too early. Um, so I'd say that, I'd say that it's, if I'm really fulfilled with the success that I define internally of the companies that I'm working with, As well as the people that I'm working with, both on my team here at Chicago Ventures and, and the, uh, founders that we've invested in. So I'd say fulfillment overall.

AI assessment note: “So I'd say fulfillment overall.”