1) 6 Tips for Chicago Startups Seeking Funding
Outside Chicago
By Lisa M. Conmy
19 April 2016
Emerging Company Exchange
Chicago startups have more local funding options than ever before. However, many founders
remain hungry to obtain funding from elsewhere—especially from the venture-rich east and west
coasts. Trouble is, for reasons both practical and instinctual, investors tend to direct their capital to
nearby companies.
While it may be an uphill battle to obtain funding outside Chicago, growth-stage startups should still
look far and wide for capital. Broadening your potential funding sources can help you scale your
company’s footprint nationally, giving you access to people with deep experience and connections
in alternative markets. Below are six tactics that an entrepreneur should consider before seeking
funding outside of Chicago.
1. Embrace your roots. Chicago is a city full of gritty entrepreneurs. Before you go looking for
funding elsewhere, you should take advantage of your ingenuity, determination and talent—
plus local funding sources—to establish consistent growth and nail down your business
model. Make it clear that all you need in order to scale is additional capital, so that when you
do sit down with venture capitalists, you have a compelling story to sell.
2. Do your homework. It’s simple, but often overlooked: go on venture funds’ websites and
research their portfolios. If they haven’t invested in companies from outside their zip codes,
they probably won’t invest in yours either. If they have invested in Chicago companies, tap
your network to connect with founders of those companies. Then ask for intros to their
investors, so you can meet them the next time they’re in town.
3. Work your network. You’ll obviously reach out to everyone you know who’s tied into other
tech communities. But you should also think about adding an advisory board member with
connections outside of Chicago. Consider entering one of the many excellent incubator
programs around the country and living in a different city for 12 weeks. You’ll come back with
enough relationships (and, hopefully, credibility and buzz) to get the right meetings when it
comes time to raising additional funding.
4. Swing for the fences. Venture investors on the coasts are high-stakes gamblers – they bet
on many startups in the hopes of hitting the jackpot on a few. If you want their cash, you’ll have
to convince them that your business could be a home run. Your idea has to be different—the
kind of company that causes major fear of missing out. It can’t just be a twist on Uber or
AirBnB, and slow-but-steady, Chicago-style profitability and growth won’t help you stand out
from the thousands of pitch decks that a prominent investor receives every year – unless, that
is, you show there is room to quickly expand nationally with additional capital.
5. Be realistic. Investors want grandiosity in your vision, not your valuation. If you’ve gotten as
far as talking valuation with an investor, it means they are interested. Keep your valuation
reasonable and defensible so that they remain interested in working with you. While this may
mean sacrificing your valuation initially, if you find the right investor you can create a company
2) worth much more in the long run.
6. Book a trip. At some point, you just have to be there, live and in-person. Buy a plane ticket
and try to set up all the meetings you can in advance. As a frugal entrepreneur, the expense
should motivate you to get meetings scheduled. Worst case, you can use the trip to network –
on any given night in a saturated market, there are sure to be at least two or three events full
of potentially valuable connections.
To learn more about this topic and similar challenges facing today’s technology companies, RSVP
for FoleyTECH Chicago on May 3, 2016. The half-day event will feature discussions with leading
technology executives, entrepreneurs and investors to provide business insights and best practices
related to the current state of the technology market.