Venture summit likely to be a big hit

May 16, 2005

BY MICHAEL KRAUSS

The White Sox battle the Cubs at Wrigley Friday, but even with the Sox hot start, the cross-town rivalry won't be the big competition of the day.

The real money game plays at the Chicago Marriott on Michigan Avenue. That's where the Midwest Venture Summit organized by the Illinois Venture Capital Association convenes.

Twenty-eight aspiring companies take the field at the summit vying for the attention and money of a host of venture capitalists and angel investors.

Seventeen companies compete on the venture track, each seeking $3-million-plus in funding. Eleven companies are newer ventures seeking initial or "seed"-stage funding.

Unlike a baseball game, there can be multiple winners.

More than 500 fans are expected to pay the $295 ticket price to attend the summit. They'll hear play-by-play from keynote speaker Richard Karlgaard, publisher of Forbes magazine and a venture capitalist with Garage.com.

Why care about the Midwest Venture Summit when you could be at the friendly confines sipping a beer?

Education and entrepreneurs

It's simple. Traditional manufacturing jobs are moving to China and India. The jobs that remain will be in the knowledge economy. They require educated workers. That's why Mayor Daley cares about our schools. Daley knows you've got to be educated to play in tomorrow's game and win a job.

Still, educating Chicago's future work force is only half the equation. As those manufacturing jobs migrate, we need entrepreneurs creating new businesses to keep Chicago prosperous.

We need both education and entrepreneurship. If we succeed in the classroom and in business creation, Chicago will be a great city for the next 30 years.

Venture capitalists provide the cash that enables entrepreneurs to take the risks that create the jobs.

The Midwest Venture Summit is the arena where the VC's connect with the entrepreneurs. If an entrepreneur hits a home run on Friday and gets funded, he or she will create more jobs locally than any ball hit on Waveland Avenue.

Growing up in Chicago, my heroes were the Cubs. My Cubs infield from third to first was Ron Santo, Don Kessinger, Glenn Beckert and Ernie Banks. The battery was Ferguson Jenkins and Randy Hundley. The outfield was Adolfo Phillips, Billy Williams and Jim Hickman. They were the stars.

These days, I think the stars are John Willis and Avy Stein of Willis Stein; Keith Crandell of ARCH Venture Partners; Bon French of Adams Street Partners; Keith Bank of KB Partners; Bret Maxwell and Mark Koulogeorge at MK Capital, and Carl Thoma of Thoma Cressey Equity Partners.

Other standouts: Steve Beitler at Dunrath Capital; Matthew McCall of Draper Fisher; Bob Geras of LaSalle Investments, and Robert Finkel of Prism Capital.

I shouldn't leave out players like John Canning of Madison Dearborn Partners, and Bruce Rauner of GTCR Golder Rauner, or Steve Kaplan, private equity professor at the University of Chicago. Then there's Maura O'Hara, executive director of the IVCA, who holds this bunch together.

There are 94 private equity firms headquartered in Illinois. They manage more than $55 billion in assets. In the last three years, they've deployed more than $6.3 billion in nearly 1,500 deals, with $1 billion in venture capital invested in Illinois companies. Over a 20-year period, these firms returned an average of 13.7 percent annually to their investors.

As Chicagoans become better educated, these firms will back entrepreneurs who will create the new jobs that will assure Chicago remains the city that works.

Think about that when you're singing "Take Me Out to the Ball Game" Friday at Wrigley.

Bits & Bytes

University of Chicago professor Marvin Zonis speaks on globalization, technology and U.S. prosperity at the Society for Information Management lunch Wednesday at Spiaggia. Also Wednesday, the MIT Enterprise Forum meets at Gardner, Carton & Douglas to discuss accelerating growth through strategic alliances.

The American Electronics Association hosts a conference on best practices in government IT contracting Thursday. Presenters include City of Chicago CIO Chris O'Brien and Paul Campbell, director-designate for the state Central Management Services. See: www.aeanet.org/midwestlocalstategov.

Michael Krauss is a Chicago area tech writer and consultant.

 

 ©2005 Marion Consulting Partners