Venture capital search goes beyond Chicago

December 5, 2005


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."

It doesn't fit the melody, but the sentiment is real.

Local entrepreneurs 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.

Serial entrepreneur

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.

Technology outlook

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 purposes.

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@

Biotech lessons

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 Center.

The forum will focus on "Measuring BIO2006's Impact: Lessons from San Diego, Toronto, and Philadelphia."

Rosenberg has assembled leaders from cities that previously hosted the global biotech convention and prospered.

Bits & bytes 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.

Michael Krauss is a Chicago area tech writer and consultant.



 ©2005 Marion Consulting Partners