J.B. Pritzker follows noble tradition of dad

February 27, 2006

BY MICHAEL KRAUSS

What Starbuck's did for coffee, J.B. Pritzker's father, Don, did for hotels. His Hyatt Regency concept put glamor, sparkle and experience into an overnight stay long before the $4 latte transformed the corner coffee shop.

This week, J.B. Pritzker's New World Ventures celebrates its 10th anniversary. With a little luck, Pritzker and New World could galvanize Chicago's tech community as his late father invigorated hotels.

New World Ventures' success rests on its focus backing tech startups that sell to large enterprises. Pritzker, 41, and his investors are betting big behind the strategy.

The jewel in New World's portfolio is Lisle-based Univa, a global leader in grid computing, a revolutionary technique that uses the resources of many separate computers connected by a network (usually the Internet) to solve huge computation problems.

Working with IBM

Univa is hot. It signed a business alliance with IBM, and if grid computing takes off, Univa could be the cornerstone of IBM's future. Behind-the-scenes financing of Univa's success is J.B. Pritzker and New World Ventures.

"When we first got into the business in 1996, there was a void in venture investing in Chicago," Pritzker says. "If you were a startup needing $1.5 million, you were petty much out of luck."

Pritzker aimed to change that.

One of New World Ventures early investments was eCollege, an on-line learning organization that went public in 1999 and recently relocated from Denver to Chicago. "ECollege was a great success," says Pritzker, who points to returns exceeding 20 times the investment.

Pritzker has good days and bad days, but his integrity and commitment to Chicago and his investors is steadfast. At the height of the dot-com bust, New World Ventures could not identify reasonable tech investments. The fund returned capital to investors rather than squander it in a downward spiraling market.

Pritzker says, "There were a lot of funds that went ahead and ended up down 50 percent."

Pritzker continues to manage his 2000 fund, which includes a number of profitable investments. He expects that fund to finish among the top quartile of year 2000 vintage funds.

Tech CEOs often loathe their VC's. Not Mike Mulica, CEO of Chicago-based Bridgeport Networks, who praises Pritzker.

Mulica says, "J.B. is as sophisticated a VC as I have seen. He has a terrific knack for identifying opportunities. He rates with the top VC's on both coasts. The good news is, being from Chicago, he values humility equal to his sophistication."

Mulica's firm develops software that enables cell phones and VoIP telephones to seamlessly connect. Bridgeport could revolutionize phone technology, much the way Univa could unsettle enterprise computing.

Other New World Ventures portfolio companies with game-changing potential are California-based Everdream and Color-ado-based Left Hand Networks.

Everdream's technology enables corporate IT execs to monitor computers in small satellite offices. Its largest client is FedEx, which has thousands of computers scattered around the world. Thanks to Everdream, FedEx can manage those PCs from Memphis.

Left Hand Networks is Pritzker's answer to high-end data storage solutions provider EMC. According to Pritzker, Left Hand Networks has technology that matches EMC's quality, but at lower cost.

A go-to guy

Pritzker is more than a VC. He's a community builder. Maura O'Hara, executive director of the Illinois Venture Capital Association, says, "Every time I ask J.B. to help, he steps up."

Pritzker was pivotal in creating the Midwest Venture Summit, which showcases local startups seeking investors.

Pritzker chairs the Illinois Human Rights Commission. He's a trustee of Northwestern University, and he's working to rebuild Bronzeville's Pilgrim Baptist Church. He's also raising money for the Illinois Holocaust Museum, and he's an advocate of early childhood development programs.

Why work so hard? "I couldn't imagine it any other way," he says.

Back in 1972, his father was asked that same question. "It has nothing to do with money," Don Pritzker told Signature magazine. "It's really the pride of being involved in something that makes people say, 'My God, look at this place!'"

If Univa, Bridgeport, Left Hand Networks or EverDream strike pay dirt, they just might say that about Chicago tech, thanks in part to J.B. Pritzker.

Michael Krauss is a Chicago area tech writer and consultant.

 

 

 ©2006 Marion Consulting Partners