A group of 44 Chicago CEOs and venture capitalists, including New World Ventures LLC Founder J.B. Pritzker, Morningstar Inc. CEO Joe Mansueto and Chicagoland Entrepreneurial Center CEO Kevin Willer, have formed a $5.7 million fund to invest in new technology businesses, mainly in the Chicago area.
The Firestarter Fund raised $100,000 and $200,000 contributions from the members with an eye to backing technology companies jointly, said Matt Moog, a co-founding member of the fund who is also CEO and founder of Viewpoints Network LLC. The group is unique in the city in that all the members focus on the digital space, he said.
Mr. Moog expects the fund to benefit from the many industry contacts the group can tap and from the expertise and experience group members can share with the startups’ executives.
“It’s a very real way to engage 40-plus founders directly in the community,” he said.
Other members of the group include Shoplocoal LLC founder Brian Hand, who co-founded the fund with Mr. Moog; Feedburner Inc. co-founder Eric Lunt; GTCR LLC Principal Bruce Rauner; OkCupid founder and CEO Sam Yagan, and Excelerate Labs CEO and co-founder Troy Henikoff. Messrs. Moog, Hand, Henikoff and Yagan will manage the fund.
While the group will meet regularly, it will vote electronically on potential investments after a member has provided due diligence on a prospective venture. Members who have contributed $200,000 will have two votes while members who have contributed $100,000 will have one vote, Mr. Moog said. A majority of votes cast will be needed to make an investment, with a higher minimum number of votes cast required for bigger investments. Members may also invest on their own.
The new fund doesn’t see itself as a competitor to existing funds in the city, such as the Hyde Park Angels, but rather a complementary capital source that will add another mark of validity to startups that win its backing.
“We don’t expect to solely fund anybody,” Mr. Moog said.
While the fund won’t be prohibited from investing outside Chicago, most investments are likely to be made in local startups because the group’s expertise is here.
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