J.B. Pritzker On The Chicago Startup Ecosystem

By January 12, 2011

In Chicago not many family names are as well known as the Pritzker family. When I sat recently with J.B. Pritzker of New World Venture here in Chicago, I found out that the man is (unfortunately) afflicted with a disease.

“I love what I do; I really do,” said Pritzker.

His disease? Being an entrepreneur.

“It makes my blood go and I love it,” he said emphatically. When I asked why he loved it so much, he told me, “I grew up exposed to the entrepreneurial lifestyle and I want my kids to grow up to love something so they can live by the old saying, ‘If you love what you do for a living, everyday is like being on vacation.’”

Pritzker told me the story of his youth, growing up watching his father build what would become the Hyatt Hotels Corporation from nothing. “My father started Hyatt with a motel near an airport that was really nothing,” said Mr. Pritzker, and my parents worked at it together. My mother would decide on outfitting the décor and style of the motel and my father would invite CEOs to dinner with our family to convince them to stay in our hotels. Building Hyatt was a family affair and my parents loved it.”

He went on and brought it full circle to his life. “Being where everyone loves what they do and everyone is working together as a team and in an industry where things are different every year is exciting; I want to replicate in Chicago that feeling I grew up with and play a part in making it happen.”

“From what I saw,” said Pritzker, “Chicago had a problem. We had venture capital companies but we didn’t have good seed funds in the city. To really get an entrepreneurial ecosystem going, you have to have someone able to put some money into the mad scientist in his garage,” he said, “and in Chicago we didn’t have that capability until very recently. So back in 2006, I decided I was going to help make that happen.”

The result was the i2a Accelerator fund with $10 million dollars in seed capital to invest. “The deals that we have done have been very successful,” said Pritzker, “and what is great is that as these companies grow, they often need venture capital which is great for New World Ventures as well as the other VC players in the space.”

Some of the companies to come out of i2a are BrightTag, Sitter City, Viewpoints and ifbyphone. “Now,” he said, “ we need to decide if we want to raise another round to do more.”

When asked what the Chicago community needs to really grow is ecosystem, Pritzker says its series entrepreneurs that have been successful. “Until very recently, Chicago did not have the type of entrepreneurs that had already had a big win, there wasn’t the guy to go to that you knew was good to bet on.”

I asked him if the old maxim of “nothing succeeds like success” held true and he thumped his hand on the table and exclaimed, “Exactly! That’s it. Without taking away anything from Andrew Mason, it isn’t often an entrepreneur hits a home run the first time out of the gate; in fact its extremely rare. “ He continued, “To really grow an ecosystem, you need successful CEOs that are ready to build a new company after having been successful at their last one. Someone like Matt Moog.”

He then told the story of how Matt Moog saved CoolSavings and turned it into a winner while so many other companies failed. (Matt also runs a social network for Chicago entrepreneurs gaining in popularity called ‘Built in Chicago’) “Matt Moog saved CoolSavings and made it successful when it easily could have gone the other way. He is the example of an entrepreneur that when he comes to me looking for investment I say, ‘Where’s my checkbook?’” said Mr. Pritzker.

We also discussed the Mayoral Race and what impact the new Mayor can have on the tech industry in Chicago. “The new Mayor will hopefully realize that having a thriving tech community is of importance to Chicago,” he said.

Then we started discussing what we knew of the candidates and their positions for Tech and the startup world in Chicago.

I have reached out to the three main candidates for Mayor in Chicago: Gery Chico, Rahm Emmanuel and Carol Moseley Braun. Watch this space soon to see where each candidate stands on our community.