{"id":323,"date":"2012-02-04T15:45:41","date_gmt":"2012-02-04T20:45:41","guid":{"rendered":"http:\/\/steinvox.com\/?p=323"},"modified":"2012-08-11T12:25:20","modified_gmt":"2012-08-11T17:25:20","slug":"startup-americawhats-missing","status":"publish","type":"post","link":"https:\/\/steinvox.com\/blog\/startup-americawhats-missing\/","title":{"rendered":"Startup Chicago & Startup America – There’s Still Something Missing…"},"content":{"rendered":"

\"\"<\/a>January 31st marks the one year anniversary of the Startup America Partnership<\/a>. Enormous news to report, and you can find the progress for the program listed on the organization\u2019s website at www.s.co<\/a>. With all this progress, what is lagging behind?\u00a0 In a single word, funding<\/strong>.<\/p>\n

The domestic growth of the new post-industrial revolution digital economy is held back by this one thing.\u00a0 We hear reports from Wall Street of \u201cmoney sitting on the sidelines,\u201d and we know that geographically speaking, VCs and technology investors are primarily located in Silicon Valley and Boston.\u00a0 These elements of the economy need to change and evolve, by getting virtual and leveraging their potential across our digitally-connected economy.<\/p>\n

The confluence of angel investors, VCs and other funding sources continue to focus leadership energy and investment primarily in the Bay Area (who doesn\u2019t know about Sand Hill Road?) and Boston.\u00a0 Sure, there\u2019s some growth and expansion in areas like NYC, Austin, and others, but the money seems to be abnormally tethered geographically polarized to the East and West Coast.<\/p>\n

\"StartupAmerica31Jan2012\"<\/a><\/p>\n

I heard one discussion at Startup America\u2019s anniversary event that identified a few of the more commonly referenced reasons.<\/p>\n

    \n
  1. VCs don\u2019t want to travel.\u00a0 Takes them out of the office, or adds cost to the investment reducing ROI (e.g., travel to board meetings).<\/li>\n
  2. There are too few good technology executives to lead these invested portfolio companies.<\/li>\n
  3. There are not enough opportunities to invest in, and open an office in Chicago (or other Midwest city).<\/li>\n
  4. There\u2019s not enough technology talent in the Midwest to staff these portfolio companies.<\/li>\n<\/ol>\n

    I heard reasons like these multiple times.\u00a0 Whatever the reason, it\u2019s ridiculous in this day and age that money flow for startup investment is retarded by geography.\u00a0 I don\u2019t know anyone that doesn\u2019t rely on Skype and GoToMeeting for virtual communication. And if we can send money anywhere through PayPal\u2026, these geographic boundaries seem to be trivial, and more like second-grade excuses not to put domestic money to work in growing the broader US economy.<\/p>\n

    Clearly, anyone that\u2019s been to a sold out Technori Pitch<\/a> event, knows that there\u2019s no shortage of new ideas, new startups, and high-tech talent in the Midwest.\u00a0 And, let\u2019s not forget where the worlds best supercomputer lives<\/a> (hint: ILLINOIS) and that the browser (yea, the thing we all use daily to interact with the Internet) was invented in Champaign, Illinois where computer scientists and new ideas are generated at an alarming rate.<\/p>\n

    These goofy reasons for not locating more high-tech funding in the Midwest are a HUGE problem \u2013 and rational thinkers know that the reasons don\u2019t pass the test of least astonishment.\u00a0 In a an alternative Darwinian perspective, this polarization of VC investment only on the coasts is potentially a path to extinction.\u00a0 If you think about what drives the cross-pollination of ideas, the interaction of entrepreneurial DNA, it demands that the money follow the ideas \u2013 not the ideas leave the environment that incubates them, to find the money \u2013 thereby adding risk by introducing foreign environmental factors that could kill the idea into a malformed failure.<\/p>\n

    It was the talk of the room at Startup America.\u00a0 I heard: \u201cwe have great ideas\u2026, but no VCs and funders will travel.\u00a0 They want us to move to Palo Alto, or Waltham\u2026 we don\u2019t want to move, nor do we want to sacrifice our entrepreneurial DNA cross-fertilized with a Midwest work ethic.\u00a0 And, especially, we don\u2019t want to leave the Midwest, where we are grounded.\u201d<\/p>\n

    It\u2019s changing \u2013 by brute force \u2013 but still it\u2019s not fast enough.\u00a0 On this anniversary, we also learned of The Firestarter Fund, led by J.B. Pritzker (of New World Ventures) and Joe Mansueto (Morningstar CEO) and Kevin Willer (CEO of Chicago Entrepreneurial Center). Crain\u2019s reported that this new $5.7 million fund<\/a> will focus on investing in new technology ventures in the Chicago-land area.<\/p>\n

    It\u2019s still not enough. We need the Hummer Winblads<\/a>, the OpenView Partners<\/a> and the Sierra Ventures<\/a> to open offices in Chicago, St. Louis, Columbus, and other locations.\u00a0 We need to realize that Chicago has a huge pool of executives coming out of ILLINOIS, Kellogg, and Booth that are up to the task of leading a high-tech company (not to mention a number of us Silicon Valley transplants that have done it before!).<\/p>\n

    In a digital economy, real jobs growth is not going to be added manufacturing jobs\u2026, but innovation jobs like those you see in the eyes of the audience at the Startup America events.\u00a0 In a digital economy, innovation is now virtual \u2013 and not geographically co-located with funding sources.\u00a0 The funding community is lagging on the progress curve that innovation has shot forward, breaking free of geographic boundaries by leveraging connectivity and virtual web-based communities and tools that the post-industrial revolution digital-economy has delivered \u2013 years or decades ago.<\/p>\n

    The people and the ideas are ready and already work virtually, thereby expanding the gene pool well outside the Boston and Bay Area.\u00a0 When will the funders begin to expand with greater virtual, and perhaps physical presence in Chicago, St. Louis, Memphis, Kansas City, and beyond.\u00a0 I think J.B. Pritzker would welcome the competition.\u00a0 I know that the entrepreneurial community would too.<\/p>\n","protected":false},"excerpt":{"rendered":"

    <\/a>January 31st marks the one year anniversary of the Startup America Partnership<\/a>. Enormous news to report, and you can find the progress for the program listed on the organization\u2019s website at www.s.co<\/a>. With all this progress, […]<\/p>\n","protected":false},"author":1,"featured_media":325,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[104,85,50,4,64,8,41],"tags":[17,15,94,20,19,34],"class_list":["post-323","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-entrepreneurship","category-innovation","category-leadership","category-social-responsibility","category-strategy","category-technology","tag-agile-behavior","tag-pervasive-strategy","tag-resistance-to-change","tag-results-outcomes","tag-revenue-pursuit","tag-vision-mission"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/steinvox.com\/blog\/wp-content\/uploads\/2012\/02\/StartupAmerica.png?fit=150%2C150&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p25ukk-5d","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/posts\/323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/comments?post=323"}],"version-history":[{"count":0,"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/posts\/323\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/media\/325"}],"wp:attachment":[{"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/media?parent=323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/categories?post=323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/steinvox.com\/blog\/wp-json\/wp\/v2\/tags?post=323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}