When technology startups are ready to turbocharge their growth, whether that means quickly expanding into new markets or hiring additional talent, they often turn to venture capital firms.
These investors are typically interested in backing early-stage companies, betting they can work with entrepreneurs to develop the next big idea -- and jointly profit from the startup's success.
Below, you will find 17 of the area's early-stage technology investment firms and examples of their local portfolio companies. The venture capital firms differ widely in their longevity and investing strategies, not to mention the size of their war chests. But for the most part, they are united by their interest in backing homegrown entrepreneurial talent.
BAIRD VENTURE PARTNERS
Founded: 2000 Founders: BVP is the venture fund of Baird Private Equity
Current (3rd) fund: $170 million (closed 2008)
Invested so far: About $85 million
Typical investment: Up to $10 million
Strategy: Business services and healthcare/life sciences companies. Prefers the lead investor position in first or second institutional rounds. Portfolio Companies:
Founder: David Jonas
Description: PharMEDium provides standard and customized drug combinations for intravenous therapies to more than 1,800 hospitals in the U.S. For example, it makes a customized mixture for use in a pump that delivers small amounts of medication to spinal fluid for pain management.
Outlook: PharMEDium is developing innovative technology platforms focusing on improving the quality of patient care delivery. Later this year, PharMEDium will launch a new product for the operating room that provides audio-visual feedback to support the anesthesia provider in verifying drug and concentration selection, as well as support the pharmacy in tracking medication utilization.
Founders: Marc Kiven, Mike Sands and Eric Lunt
Description: BrightTag makes software that gives website owners control over code that is planted by outside marketers to collect users' data and track their preferences.
Founder: Genevieve Thiers
Description: Consumers can use Sittercity's website to find providers of child care, pet care, elder care, housekeeping services and tutoring.
HYDE PARK VENTURE PARTNERS
Founders: Ira Weiss and Guy Turner
Current (1st) fund: $18.15 million raised of a $20 million -- $25 million goal
Invested so far: About $0.8 million
Typical investment: $750,000 -- $2.5 million
Strategy: Early-stage software-as-a-service and healthcare IT companies in the Midwest
Founders: Bob Gillespie, Tracey Wiedmeyer and Rich Scamehorn
Funding: $1.5 million
Outlook: We have strategically added 20 new employees, moved to a larger office space, seen significant wins over our competitors and remain on track to double our revenue for the second year in a row. I expect the momentum to carry through the remainder of the year and beyond, as we transition from a tech start-up into a high-growth company.
Founder: Joshua Hernandez
Description: Tap.Me's technology platform allows brands to advertise within social and mobile games in integrated ways that don't interfere with gameplay.
Founders: Kapil Chaudhary and Stuart Larkins
Current fund: $10 million (I, closed 2007)
Invested so far: Fully invested
Typical investment: $250,000 -- $1 million
Strategy: Early-stage Illinois companies in technology-enabled services, new media and education, and consumer and retail products.
Founders: Jim Heising, Ron Franczyk and Andrew Newman
Funding: $2.8 million
Outlook: We just launched a tool for app developers to more easily integrate features from other apps and services. This ability to quickly create a mashup offers an alternative to traditional advertising. We'll be focused on rolling these options out to developers like Fodor's Travel and service providers like Expedia so users can book hotels and other travel deals from within the Fodor's App.
Founders: Glen Tullman and Pete Kadens
Description: SoCore installs commercial solar-power systems for customers that include retailers such as IKEA and JCPenney.
Founders: Shawn Carpenter and Ara Anjargolian
Description: YCharts provides stock research and analysis, with an emphasis on easy-to-understand data visualization tools.
Founders: Launched by the University of Illinois
Current (2nd) fund: $70 million (closed 2009)
Invested so far: About $35 million
Typical investment: $1 million -- $3 million
Strategy: Early-stage, research-based companies in information technology, physical sciences, life sciences and clean technology.
Local Offer Network
Founders: Dan Hess, Greg Hart and Jorge Zapata
Funding: $1.5 million
Description: LON, a daily deal aggregator, offers services such as a syndicated daily deal feed for publishers to offer discounts to their audience and runs dealradar.com, a consumer-facing website.
Founders: Stephen Boppart and Scott Carney
Description: Diagnostic Photonics makes imaging technology that helps clinicians see cellular tissue structures and evaluate diseased tissue during surgical procedures.
Founders: Daphne Preuss and Greg Copenhaver
Description: Chromatin is a biotechnology company that develops new seed products and renewable, plant-derived materials that can be used by power, fuel and chemical producers.
Founding partner: Randy Rissman
Current fund: $25 million
Invested so far: Undisclosed
Typical investment: $1 million -- $3 million
Strategy: Companies with high-growth potential in industries such as kids' entertainment, wireless technology, consumer e-commerce and social media.
Founders: Ed Lewis and Dave Shemenski
Funding: $1.25 million
Outlook: We are launching a Family Gift service that allows parents to invite extended family to participate in a gift purchase via Facebook. Later this year, we will launch a mobile family platform, allowing parents to set permissions for mobile apps and purchasing by their kids.
Founders: Mike Evans and Matt Maloney
Description: GrubHub's website and mobile applications connect consumers with restaurants in their area that deliver food.
Founders: Eric Lefkofsky and Brad Keywell
Current fund: $200 million (closed 2011)
Invested so far: Less than $100 million
Typical investment: $500,000-$1 million for a seed round; $1 million-$3 million for Series A
Strategy: Early-stage companies in large, high-growth industries such as social media, the consumer Web and business-to-business technology.
Founder: Brad Weisberg
Funding: $1.25 million Employees: 9
Description: Car owners can use BodyShopBids' website or mobile app to upload a photo of their damaged vehicle. Local body shops bid on the repair work and customers can book appointments online. Outlook: I've been overwhelmed with how grateful people have been for taking a frustrating process and making incredibly simple. Our goal is to create a turn-key solution for car repair that benefits customers, body shops and insurance carriers.
Founders: Ashish Rangnekar and Ujjwal Gupta
Description: BenchPrep makes test preparation courses that can be accessed on the Web, iPhone, Android or iPad.
Founder: Justyn Howard
Description: Sprout Social's technology helps companies manage their social media presence through publishing updates across platforms, managing teams and measuring results.
Founders: Bret Maxwell, Mark Koulogeorge, Karen Buckner and Mark Terbeek
Current (2nd) fund: $250 million (closed 2011)
Invested so far: $125 million
Typical investment: $2 million -- $5 milliStrategy: Interested in digital media, marketing automation, software and education technology.
Eved Founder: Talia Mashiach
Funding: $12.3 million
Description: Eved's technology platform automates the buying and selling for meetings and events.
Outlook: We are focused on continuing to increase online transactions and have shown a 150% increase over the last year in transactions.
Founders: Andrew Kaboff and Steven Wegner
Description: CellTrak specializes in mobile technology for home and hospice care providers, allowing aides and nurses to accurately collect, organize and access patient information.
Founders: Nick Rosa and Bob Shapiro
Funds: Sandbox runs two funds that are fully invested, the Sandbox Venture Fund ($18.8 million, closed 2008) and the Blue Cross Blue Shield Fund I ($116 million, closed 2008). It has two new funds, the Sandbox Advantage Fund ($50 million) and the Blue Cross Blue Shield Fund II ($179 million).
Typical investment: $1 million-$2 million for the Sandbox Advantage Fund; $1 million-$10 million for the Blue Cross Blue Shield Fund II.
Strategy: The Blue Cross Blue Shield Fund II focuses primarily on health care information technology. The Sandbox Advantage Fund will co-invest with the health care fund and also back internally generated projects. Portfolio Companies:
Founders: Cecelia Myers and Millie Tadewaldt
Description: CakeStyle is a personal shopping service for women. Customers complete an interview with a stylist, either virtually or in person, and receive a customized box of clothing and accessories every season. Outlook: We're bringing our CakeStylists to cities across the U.S. in the next year via our pop-up shops. We want women all over the country to be able to meet their stylist face-to-face and learn about CakeStyle. We're starting by offering more appointments than ever in Chicago, and our next stop is San Francisco.
Founder: Ryan Schoop
Description: Doggyloot is a daily deal company for dog owners.
Founders: Sue Khim, Sam Solomon and Silas Hundt
Description: Alltuition makes online tools for families to manage educational debt and the financial aid process.
APEX VENTURE PARTNERS
Founder: James Johnson
Current (6th) fund: $140 million (closed 2007)
Invested so far: Declined to answer.
Typical investment: $200,000 to $6 million
Strategy: Apex focuses on technology-enabled services, information technology and clean technology sectors.
CEO: Brian Spaly
Founded: 2009 Funding: $11 million Series A
Employees: About 90
Description: Offers men a less time-consuming way to shop by shipping clothes to try-on and only charging them for what they keep.
Outlook: "We currently have 11,000-plus customers and hope that by the end of next year we have over 100,000," Spaly said.
Founders: Ross Shelleman and Dr. Andrew Hamilton
Description: Data, analytics and direct mail for targeted marketing
ARCH VENTURE PARTNERS
Founders: Steven Lazarus, Keith Crandell, Clinton Bybee and Robert Nelsen
Current (7th) fund: $400 million (closed 2007)
Invested so far: About $300 million
Typical investment: $100,000 through "several million"
Strategy: ARCH specializes in the so-called "hard sciences," including advanced semiconductors, biotech, instrumentation, chemicals, etc. They work with researchers at universities and national laboratories to commercialize their innovations. Portfolio Companies:
CEO: Gary Tyreman
Founded: 2004 with a major pivot in 2010
Funding: $9.5 million in Series E and A (post-pivot)
Description: A product that helps companies efficiently spread research and development work across multiple computers.
Outlook: Univa projects doubling its business this year, while growing its customer base four times. Half of this growth will come from Europe and Asia.
Founders: Dr. Samuel Wickline, Stuart Solin, Kirk Wallace and Mike Hughes
Description: Developing a new way of imaging DNA, proteins and cells for medical and pharmaceutical research
Founders: Jim Dugan, John Dugan and Peter Ianello
Current (2nd) fund: $50 million (closed 2008)
Invested so far: About $32 million
Typical investment: $50,000 to $100,000 for seed investments; $500,000 to $2 million for main funds
Strategy: OCA typically leads or co-leads initial funding rounds. It recently launched OCA EDGE, which provides seed capital, often to consumer-facing web and mobile-commerce startups. Portfolio Companies:
Apparel Media Group
Founder: Jared Golden, Gerry Hays and Amish Tolia
Funding: $1.8 million from seed and Series A rounds
One sentence description: Enables companies to advertise through hyper-local sponsorship programs; for example, Gatorade sponsoring a kids' soccer team or AXE sponsoring college student groups. Outlook: Apparel Media currently helps businesses reach groups in the offline world (via merchandise), but this year the company is launching its first consumer-facing platform, called Pear. The app enables school groups, sports teams, etc. to earn sponsorships by promoting a business of their choice via social media.
Founders: Seyi Fabode and Phil Nevels
Description: Helps consumers acquire cheaper electricity with a few mouse clicks.
Founder: Chris Gladwin Description: Developed and offers a cutting-edge storage method for big data
Founders: Steven Miller and Bruce Barron
Current (2nd) fund: $15.2 million (closed 2005)
Invested so far: All of it. Typical investment: $1 million to $2 million
Strategy: Origin specializes in e-commerce, social media and software as a service companies. They target Chicago-area and Midwestern companies. Portfolio companies:
Founder: Irv Shapiro
Funding: $17.6 million in Series A and B rounds
Description: Using unique phone numbers, Ifbyphone tracks the sources of companies' incoming calls, thereby measuring the strengths of different online and offline advertising tools. Outlook: Their goal is to double revenue and penetrate their technology deeper into several sectors, including real estate and home services. Each of these sectors relies heavily on phone conversations to close business.
Founders: Matt Maloney and Mike Evans
Description: An online food-ordering service
Founder: Dennis O'Mahoney
Description: Helps insurance companies streamline their claims processing
Founders: Keith Bank and Byron Denenberg
Current (2nd) fund: $75 million (closed 2001)
Invested so far: All of it.
Typical investment: $3 million to $5 million
Strategy: KB Partners is in the process of winding down its operations and working with its four remaining portfolio companies toward exits. Meanwhile, Bank and Denenberg are investing their own capital as angel investors. Their investments range from $250,000 to $4 million.
Club Champion Golf
Founders: Keith Bank and Joe Lee
Funding: $1.15 million in Series A
Description: A golf club custom-fitting and building service.
Outlook: Club Champion has four locations — three in the Chicago area and one in Philadelphia — and will open two more this year.
Fusion Risk Management
Founder: David Nolan
Description: Cloud-based risk management software
Founders: Troy Henikoff, Sam Yagan, Sandbox Industries and the I2A Fund
Current (2nd) fund: $1.5 million (closed 2011)
Invested so far: About $1 million
Typical investment: $25,000 in return for 6 percent equity
Strategy: Excelerate Labs is Chicago's leading incubator, meaning it admits about 10 startups annually and puts them through a three-month boot camp. The process concludes with Demo Day, where each company pitches to an audience of about 500 potential investors at the House of Blues.
Founder: Maida Swenson-Fortune
Funding: $25,000 via Excelerate Labs
Description: An online marketplace for fine art.
Outlook: "In the coming year, we plan to create a substantial network of exceptional artists and to demystify the art buying process for thousands of people," Swenson-Fortune said.
Good Karma Clothing for Kids
Founder: Sharon Schneider
Description: A subscription service for baby clothes
Founders: Dr. Andrew Albert and Scott Vold
Description: A cloud-based tool that helps doctors and patients with scheduling and referrals.
Founders: Matt Moog and Brian Hand
Current (1st) fund: $5.7 million (closed 2012)
Invested so far: $525,00
Typical investment: $75,000 to $200,000
Strategy: FireStarter focuses on software as a service, e-commerce, and digital media and marketing. It invests in companies that are at or near revenue generation, with a business plan and well-developed technology. Portfolio Companies:
Founder: Jeff Hyman
Funding: $2.7 million in seed and Series A rounds
Description: Retrofit is a weight-loss program that heavily relies on technology, including wireless activity trackers and wi-fi scales.
Outlook: "Our sole focus is making Retrofit the best possible product," Hyman said. "If we do that, and people successfully lose weight, the rest will take care of itself."
Founders: Marc Halpin and Daniel McCormick
Description: Helps large companies host events for 20 to 100 guests — clients can select between pre-packaged or customized options
Founder: Joshua Hernandez
Description: A technology platform that allows companies to advertise within mobile games.
CERES VENTURE FUND
Founders: Sona Wang, Donna Williamson and Laura Pearl
Current (1st) fund: Undisclosed (closed 2006)
Invested so far: Two-thirds
Typical investment: $250,000 to $1 million
Strategy: Ceres focuses on health care, information technology and business services. About half of their deals involve women-led companies.
Founder: Nicole Loftus
Year Founded: 2002
Funding: $7 million in Series A, B, C
Description: Promotional products (mugs, T-shirts, pens) distributor for large businesses
Outlook: Zorch just launched a new technology that makes its sourcing process for T-shirts, mugs, hats, etc. more efficient, so clients, such as Citigroup and Chevron, save money.
Founders: David Frej and Nancy Lerner
Description: Helps companies find entry-level/Gen Y workers, often using social media
NEW WORLD VENTURES
Founders: J.B. and Anthony Pritzker
Current Fund: Not applicable. The Pritzkers invest their own capital and do not raise money from outside investors.
Invested so far: Not applicable. It's a perpetual fund, meaning they are always open to deals.
Typical investment: $3 million to $25 million
Strategy: The Pritzkers, who are brothers, are looking for seasoned entreprenuers who have previously led or worked at startups and are focused on solving problems in large, growing markets. They occasionally make seed investments of $50,000 to $1 million.
Founders: Dan Malven and Michelle Sobel
Funding: $14 million in Series A and B
Description: Operates sexualhealth.com and STDtestexpress.com, which enables people to remotely order an STD test and receive the results online.
Outlook: "We hope to be the largest online STD clinic a year from now," said CEO Sridhar Murthy. The company will upgrade its services this fall, including accepting insurance and expanding its test offerings.
Founders: Stan Honey, Jerry Gepner and Bill Squadron
Description: A creator of sports marketing technology, most notably the yellow first-down line during NFL broadcasts.
Founder: Mike Rothman
Description: Uses online technology to help companies manage and maintain buildings
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