Venture capital search goes beyond Chicago
December 5, 2005
BY MICHAEL KRAUSS
Remember the Beach
Boys song "California Girls." A number of Chicago-area
entrepreneurs sing a similar tune about California venture capitalists.
To paraphrase that golden oldie, "I wish Chicago VC's could
all be like California VC's."
doesn't fit the melody, but the sentiment is real.
won't come right out and say it, but some think California VC's
might offer better deals. Consider Jason Liu, CEO of Lisle-based
Intrinsic Technologies. Liu is shopping for $10 million in venture
funding to exponentially expand his company. Liu is definitely
talking to Chicago VC's. He's also looking on the coasts.
Intrinsic creates infrastructure
solutions around Microsoft products. "We enable an enterprise
to deploy an operating system at 20 to 40 percent lower cost,"
says Liu. With Microsoft's new operating system Windows Vista
on the horizon, Intrinsic is poised for growth. The company has
won awards as a Microsoft partner.
Liu is a serial entrepreneur.
While at the University of Pennsylvania's Wharton School of Business,
he joined Ravisent Technologies, becoming CFO.
Ravisent made software
that enabled DVD players to display video. "We grew 24,000
percent," Liu says. "We were the ninth-fastest growing
private company according to Forbes magazine from 1994 to 1998."
The company raised $85 million and, after an IPO, had a market
cap of $1 billion. The company was later merged, and Liu left,
making his way to Chicago.
So why is Liu looking
for the dough on the coasts?
"There are more
VC's," he says. "They tend to have more capital. They
can be a little bit more aggressive. If you have half a billion
to deploy versus $100 million you can take a little more risk."
Veteran VC Bret Maxwell,
managing general partner of Northbrook-based MK Capital offers
this counsel: "If you choose your VC partner primarily on
valuation, you'd probably choose your brain surgeon in similar
fashion. In either case, good luck. "The cold hard reality
is valuation should play a role in the decision making process
but a relatively small role."
Like brain surgery,
Maxwell thinks entrepreneurs should focus more on the long term
outcomes than short term price.
Why care what tune
Chicago's entrepreneurs sing? Because companies reside near their
VC's. Jobs follow. I hope Liu and Maxwell find harmony.
John Gentry, Computer
Sciences Corp. managing director, unveils a study of technology
adoption among Chicago organizations at tomorrow's Executives'
Club technology conference at the Chicago Hilton and Towers.
The study was conducted
in collaboration with the Mayor's Council of Technology Advisors
and the Executives' Club.
"We wanted to
find out how businesses in Chicago leverage technology,"
says Gentry, who was tight-lipped about the findings. He offered
one vignette: "Over 60 percent of respondents say technology
is going to be more critical in 2006."
Gentry believes there
is unrealized potential for applying technology to business strategy,
and that local companies may be using IT for more nuts and bolts
Debating the findings
and adding their own perspectives on the 2006 technology outlook
will be a panel of local tech leaders including; CNA CIO John
Golden; Exelon CIO Daniel Hill, and Archipelago CTO Steve Rubinow.
For a copy of the survey
results, e-mail: Surveymanager@ chicagotechsurvey.com.
Chicago hosts BIO2006,
the global biotech industry conference, April 9-12. The University
of Chicago's Robert Rosenberg wants to make sure it is a big success.
On Friday, Rosenberg convenes the Chicago Tech Forum at the Gleacher
The forum will focus
on "Measuring BIO2006's Impact: Lessons from San Diego, Toronto,
Rosenberg has assembled
leaders from cities that previously hosted the global biotech
convention and prospered.
editor Danny Sullivan hosts the Search Engine
Strategies conference at the Chicago Hilton and Towers starting
today. The event brings the global gurus of search technology
to town. . . . Congrats to Matt Spiegel whose
search marketing advisory services firm, Resolution Media, has
been acquired by Omnicom Group.
Krauss is a Chicago area tech writer and consultant.