We 💖 Flyover Country
In past blog posts, we’ve written about the next generation of social entrepreneurs in Chicago, why impact entrepreneurship is thriving in Chicago, and the newest players on the Chicago impact scene. Inc.com published a piece recently that said when it comes to social entrepreneurship and building companies with the intention of a greater good, there’s no better place to be than Chicago. Still, we get a lot of questions from investors on the coasts about why we’re based in “flyover country” — as if it’s a disadvantage.
Actually, it’s a point of pride and advantage. Being in Chicago doesn’t prevent us from investing in coastal entrepreneurs (who make up 39% of our current portfolio and, in several cases, held rounds open for us because they valued our participation as a member of their investment syndicate). But we also see a lot of startup companies in between the coasts led by great entrepreneurs with innovative and impactful business models, that get overlooked by investors on the coasts. We think being here means we get the best of both worlds.
We’re always happy to remind people why we love being based where we are.
Over the last decade, the middle of the country has cultivated a community of thriving tech entrepreneurs and startups. We’ve seen the startup scene transform Chicago, bringing excitement and optimism, renewing our creative culture, and inspiring innovation. As Yazin Akkawi recently wrote, “the entrepreneurial spirit in Chicago has never been more alive…Chicago attracts get-shit-done, no-nonsense leaders.” Steve Case agrees with us: check out Rise of the Rest, his nationwide effort to highlight the work of and invest in entrepreneurs outside of Silicon Valley and NYC. It also doesn’t hurt that operating costs are lower and talent more loyal outside of those markets.
Booming Venture Capital
As the tech startup scene continues to grow, so does the venture capital ecosystem. Hyde Park Angels recently released its 2017 Midwest Startup and Venture Capital Market Analysis, an in-depth and insightful overview of current investment and venture capital trends in the Midwest. Research shows that the Midwest is the biggest venture capital presence outside of California, with Chicago leading the nation with the largest number of exits producing returns over 10x.
Our Impact Engine values include humility, authenticity, and scrappiness — and they could easily be mistaken for “Midwestern” values. When Crowd Companies’ Jeremiah Owyang asked his Midwestern colleagues to share how they define Midwestern values, the three themes that emerged were a strong work ethic, modest integrity and helping others. Researchers from the University of Cambridge analyzed personality traits of 1.6 million Americans and found that the Midwest is the most “friendly” region of the country. We’re always eager to ask “how can I help?” without expecting reciprocation, and we’re deeply passionate about our community. We identify strongly with that approach, and it’s reflected in how we work with our entrepreneurs and investors.
It doesn’t surprise us that impact investing is thriving here because Midwesterners have always brought a civic-minded outlook to all aspects of life, and have long been paving the way in activism and civic engagement. From fighting for eight-hour days and fairness, justice and equality at work, to ending corporate greed and poverty, Chicago is considered the birthplace of the American labor movement. Today we’re still moving the needle on human rights and community service. States like Iowa, Minnesota and Illinois allowed same-sex marriage years ahead of New York and California. In a 2009 study on Americans’ volunteering habits, the Corporation for National and Community Service found Midwesterners to be most charitable with their time, with 30.2 percent of people in the region having volunteered in the past year.
In summary, we’re in the best place we could be. The Midwest has all the best ingredients for a thriving social entrepreneurship and impact investing community: a growing tech and venture capital ecosystem, strong values, and a rich history of civic leadership. We’re also a direct flight from a central location to pretty much anywhere else in the country we want to invest or partner. We look forward to working with you to build the impact investing ecosystem, wherever you are!