New IVCA chief in key spot to boost job growth

August 30, 2004

BY MICHAEL KRAUSS

Can Robert Finkel transform the Land of Lincoln into the Land of Google? Cheer him on if you want more jobs in Illinois. Finkel, managing partner of private investment fund Prism Capital, is passionate about the venture capital business and optimistic about our state. As incoming chair of the Illinois Venture Capital Association, Finkel is positioned to resolve some lingering problems.

There isn't enough venture capital to nurture emerging enterprises, and what money that is here doesn't get behind local companies. Our region lacks the informal networks that weld entrepreneurs, venture capitalists, academics and government officials -- networks that transformed Silicon Valley into the Land of Google.

If you think we Grabowskis ought to leave the Google stuff to the propeller heads in California, think again. Start-ups like Google create more than wealth. They create employment. Yet, much of that venture money is managed by California firms, and the jobs stay near the money.

Dwarfed by California

Citing data from research house MoneyTree, the IVCA reports that California VCs had about $97 billion under management in 2003. Illinois VCs had roughly $5 billion.

Last year, California VCs invested $5.3 billion while Illinois firms invested about $415 million. In California, nearly 69 percent of the dollars backed California companies. In Illinois, only about 17 percent of the dollars backed Illinois companies.

IVCA says venture-supported companies generated $34 billion in revenue, and employed 236,000 in Illinois in 2003. Imagine how robust employment would be if we had California's pie and deployed it locally.

I'm for a balanced economy in Sweet Home Chicago, but we need our fair share of Googles, and that's where Finkel can help. Let's grow this job-creating industry called venture capital and get them investing locally.

Finkel's predecessors made a good start. Steve Beitler, senior managing director of Dunrath Capital; Bret Maxwell, managing partner, MK Capital; and Carl Thoma, managing partner, Thoma Cressey Equity Partners transformed the IVCA into a pivotal organization. They should stay at it.

What's ahead on Finkel's watch? Keep educating legislators. Pass the $200 million Illinois Opportunity Fund. Remove disincentives to housing venture funds in Illinois. Explain the pros and cons of freedom-of-information regulations and their negative impact on public institutions. Host events like the Midwest Venture Summit where entrepreneurs showcase companies and meet investors.

Logistics gift for Loyola

When John Caltagirone studied at Loyola in 1969, they used slide rules and adding machines to teach logistics and distribution management. Texas Instruments calculators weren't available. These days, preparing MBAs for the world of supply-chain management requires costly technology.

To solve the problem, Caltagirone, vice president for Deerfield-based Revere Group, orchestrated a $1.3 million gift of state-of-the-art software, training and support services from Adexa Inc. a leading provider of supply chain solutions.

"Supply chain management is one of the areas that businesses focus on to reduce costs and improve customer service," says Jim Zydiak, Loyola University professor of operations management. "The technology is very expensive. Many academic institutions don't get their hands on the latest tools."

Thanks to Caltagirone, today's Loyola students will.

Bits & bytes

Smart move by Motorola. CEO Ed Zander will keynote the 2005 International Consumer Electronics Show in Las Vegas this January. It's one of the top global tech venues ... Slow summer? Not for professor Chad Mirkin, director of NU's Institute for Nanotechnology. He's investigating potential nano approaches to new diagnostic tests for Alzheimer's. Also in the works, "HIV detection systems that can be used for Third World applications and for screening the nation's blood supply," says Mirkin. ... Life after Whittman-Hart? Michael Berent, a Whittman-Hart alum, joined Tahoe Partners as chief operating officer. The firm has over 50 employees and is located at Halsted and Chicago doing IT strategy and implementation, ERP and custom software applications work for mid-sized companies. Sounds strikingly similar to Whittman-Hart.

Michael Krauss is a Chicago-based tech writer and consultant.

 

 ©2004 Marion Consulting Partners