CHICAGO | Economic & Business Development

[the urban politician]

^ Plus, too many younger people give too much importance to VC, forgetting that it is a small fraction of vehicles by which company growth is fueled.

[marothisu]

Originally Posted by the urban politician

^ Plus, too many younger people give too much importance to VC, forgetting that it is a small fraction of vehicles by which company growth is fueled.

I think we're gone over this before, but tons of companies in history relied on an initial round or two of funding to help get off the ground. Microsoft, Intel, Apple, Compaq, Amazon, Google, Facebook, etc - they all needed initial rounds of funding. Obviously they have to do the leg work, but very few companies in tech, at least really successful ones, have not needed to take in a few rounds of funding first.

* Hewlett Packard - $538 in 1938
* Microsoft - $1M from Technology Venture Investors in 1981
* Intel - $2.5M from Arthur Rock
* Apple - $250K from Mike Markkula in 1977
* Amazon - $8M from Kleiner, Perkins, Caufield and Byers in 1995
* Compaq - $1.5M from Ben Rosen and Sevin Rosen Funds in 1982
* eBay - $6.7M from Benchmark Capital in 1997
* Facebook - $500K from Peter Thiel in 2004 and then $12.7M from Accel Partners in 2005
* Google - $100K from Andy Bechtolsheim in 1998 and then $25M from Kleier, Perkins, Caufield, and Byers in 1999

Obviously you don't necessarily need funding and there's a TON more work other than getting funding, but securing funding has been vital to success for companies you probably didn't even think took initial funding (i.e. Intel). I'm sorry, but without some initial investment , we'd probably not have an Apple computer. Do you seriously think a small handful of guys could have mass produced those computers in their early product days? No - Mike Markkula knew that which is why he invested in them. Even Intel and Microsoft relied on initial funding to get off the ground.

So from a perspective of needing, you don't necessarily need it as there's tons of companies who didn't need it either (most of them were founded longer ago), but to downplay the potential importance of the role that VC has still had in many companies that have been successful for awhile is a bit ignorant.

[the urban politician]

^ My point was clearly missed.

I’m not saying that new companies don’t need seed funding. I’m just saying that the Venture Capital model is one of many ways to achieve this. I remember reading recently that it’s still a tiny minority of ways by which new companies get funded.

So when ignorant fools see Chicago perform poorly on a VC list they assume Chicago isn’t birthing new companies like those “superstar” coastal cities are but the truth is, VC is far, far, far from telling the full story

[marothisu]

Originally Posted by the urban politician

^ My point was clearly missed.

I’m not saying that new companies don’t need seed funding. I’m just saying that the Venture Capital model is one of many ways to achieve this. I remember reading recently that it’s still a tiny minority of ways by which new companies get funded.

So when ignorant fools see Chicago perform poorly on a VC list they assume Chicago isn’t birthing new companies like those “superstar” coastal cities are but the truth is, VC is far, far, far from telling the full story

Totally and utterly agree with you. It's just one way, but good (and lucky) business people are able to do this stuff with minimal funding. There's many examples of that too including many from Chicago even in these days .

[Justin_Chicago]

Or you can just ICO. I have a friend at New Alchemy. They raised over $3.2 billion for start-ups. Avoid giving up equity.

https://newalchemy.io/

[Vlajos]

http://www.chicagobusiness.com/reale...-downers-grove

[marothisu]

Originally Posted by Vlajos

http://www.chicagobusiness.com/reale...-downers-grove

A forumer here who works for FTD shared the move a few months ago...good to see it come too fruition

[bnk]

Just poaching the inner Burbs. Zero some game here. Awake me when we relocate a HQ from out of state, which we do have a history of...

But moving a HQ 15 miles closer to downtown does not create anymore jobs for Chicagoland. It might actually produce less jobs overall but raise rents DT instead.

Its not like FTD is a rapidly growing international corporation. I see little growth potential from them unless someone can prove me wrong here.

[Vlajos]

^ as a city dweller, I prefer jobs be in the city

[the urban politician]

Originally Posted by bnk

Just poaching the inner Burbs. Zero some game here. Awake me when we relocate a HQ from out of state, which we do have a history of...

But moving a HQ 15 miles closer to downtown does not create anymore jobs for Chicagoland. It might actually produce less jobs overall but raise rents DT instead.

Its not like FTD is a rapidly growing international corporation. I see little growth potential from them unless someone can prove me wrong here.

Would this headline make you feel better:

Amazon chooses Chicago. Bezos announces 50,000 jobs immediately, followed by another 50,000 over two years. Rahm Emanuel pops champagne with Gov Rauner

[the urban politician]

I’m sure they will be derided by Indie label-listening hipsters as evil, greedy developers, but we need more heroes like these guys on the south side:

http://www.chicagobusiness.com/reale...n-chicago-lawn

We need a LOT more of these people. Perhaps these areas will rise up again

[Justin_Chicago]

Fixer, an On-Demand Handyman Startup From Grubhub Co-Founder Mike Evans, Raises $4M

Fixer, a new Chicago startup led by Grubhub co-founder Mike Evans, announced Wednesday it has raised $4 million in funding.

Fixer, founded in May of 2017, is an on-demand handyman service that sends a professional to your door to handle electrical, plumbing, carpentry and other household issues. The round was led by Cambridge, Ma.-based VC firm Founder Collective, and other backers include Impact Engine, Hyde Park Venture Partners and OATV. The startup has now raised $5 million to date.

Fixer charges a rate of $94 to $110 per hour. It currently has a team of 25 Fixers, who have completed 3,000 jobs since launching one year ago. The company declined to share specific revenue figures.

Article: https://www.americaninno.com/chicago...ans-raises-4m/

[LouisVanDerWright]

Originally Posted by bnk

Just poaching the inner Burbs. Zero some game here. Awake me when we relocate a HQ from out of state, which we do have a history of...

But moving a HQ 15 miles closer to downtown does not create anymore jobs for Chicagoland. It might actually produce less jobs overall but raise rents DT instead.

Its not like FTD is a rapidly growing international corporation. I see little growth potential from them unless someone can prove me wrong here.

Except, as I've repeated ad nauseum here, it's literally not a zero sum game. If you actually study economics you would know that cities exist because of economies of agglomeration. This is the simple concept that the more densely packed businesses and people are, the more they all benefit. FTD benefits by it's employees picking up on new and innovative ideas and from better access to labor. The city benefits because FTDs employees might have lunch with tech employees and they might come up with an indea for a new flower delivery tech startup. The employees benefit because they no longer waster tons of extra time and money commuting 13 miles by car. Instead they spend that time and money on leasure activities in the heart of the city again creating more jobs, more opportunities for innovation, etc.

Being quarantined on corporate campuses is highly inefficient, it flies in the face of everything we know about economics. It's wasteful and doesn't even benefit the corporation. In the last century people actually taught in business school that a company was better off in a suburban fortress where no one can steal their ideas. Then we actually saw the results of that and realized that for most businesses it's actually better to allow ideas and employees to circulate because, even though you lose some ideas, overall more ideas are created resulting in a rising tide lifting all boats.

So no, suburban companies moving downtown is not zero sum. It means less waste, better innovation, more growth in services as employees find themselves with more time. It means more and greater specialization in the work force making not only FTD more competitive nationally and globally, but all the other firms proximate to FTD who reap the ancillary benefits of yet more white collar workers nearby. Moving jobs downtown benefits Chicago most of all, it actually puts us in a position where we can leverage the second densest CBD on Earth to make our economy as a whole more competitive.

[the urban politician]

^ I like to read what you’re saying, but in reality it’s all just conjecture.

I’d like to see the evidence that companies actually perform better when located in the heart of cities as opposed to in suburban campuses

[F1 Tommy]

Moving 15 miles east does all that.... Do you have the numbers to prove that or are they moving for tax breaks?? Is FTD going to fire it's workforce and hire only people from Chicago??

" It means less waste, better innovation, more growth in services as employees find themselves with more time. It means more and greater specialization in the work force making not only FTD more competitive nationally and globally, but all the other firms proximate to FTD who reap the ancillary benefits of yet more white collar workers nearby. Moving jobs downtown benefits Chicago most of all, it actually puts us in a position where we can leverage the second densest CBD on Earth to make our economy as a whole more competitive. "

[Vlajos]

Were tax breaks mentioned? Highly doubt anything was offered by the city.

[F1 Tommy]

Originally Posted by Vlajos

Were tax breaks mentioned? Highly doubt anything was offered by the city.

My point is this is just a location change that might pick up a few new local employees. The attitude around here is wrong. Moving from point A to point B in the Chicago area is not helping the overall economy as much as some think. When they went the other way from Chicago to the suburbs people just drove to a new location. I do like seeing Chicago do well but all this hate for the suburbs is silly. We need to pull companies from other states and countries, not from the METRO CHICAGO AREA.

[Vlajos]

Originally Posted by F1 Tommy

My point is this is just a location change that might pick up a few new local employees. The attitude around here is wrong. Moving from point A to point B in the Chicago area is not helping the overall economy as much as some think. When they went the other way from Chicago to the suburbs people just drove to a new location. I do like seeing Chicago do well but all this hate for the suburbs is silly. We need to pull companies from other states and countries, not from the METRO CHICAGO AREA.

Sure, I am very happy seeing the trend back to the City though.

[OrdoSeclorum]

Originally Posted by the urban politician

I’d like to see the evidence that companies actually perform better when located in the heart of cities as opposed to in suburban campuses

To some extent, the burden of proof is on the person making the opposing claim here. Why wouldn't, corporations perform better in a location where they have access to more talent, shorter commutes, a wider employee collection watershed and easier access to business services and collaborators?

Beyond that, the proof of the pudding is in the tasting, right? If corporations are increasingly choosing to be downtown, they are making a statement that they see it as being better for the bottom line.

We also have countless examples of industries thriving because they co-localize. Jewelers in Amsterdam. Finance in various locations. Technology of various sorts in various locations. Of course, not all of these examples will speak to city-versus-burbs specifically, but the proximity affect scales. It would be weird if it didn't. This is literally why cities exist, even in pre-history. It's easier to defend, share resources, communicate, efficiently utilize infrastructure and increase the velocity of trade when barriers between connections are low.

Ed Glaeser has a lecture on the economics of agglomeration here: https://www.setthings.com/en/economies-agglomeration/

Here's a chapter examining agglomeration effects. synthesis: very strong: http://www.nber.org/chapters/c7977.pdf

[F1 Tommy]

Originally Posted by OrdoSeclorum

To some extent, the burden of proof is on the person making the opposing claim here. Why wouldn't, corporations perform better in a location where they have access to more talent, shorter commutes, a wider employee collection watershed and easier access to business services and collaborators?

Here's a chapter examining agglomeration effects. synthesis: very strong: http://www.nber.org/chapters/c7977.pdf

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Not really unless they have a big turnover in employee's. The commute is longer for most. Also Downers Grove has very good train service. That being said I can see why they would like to be downtown. It's more about the prestige of being there along with the fact they may have gotten a good lease deal. Also one of the owners lives downtown. This is not a real gain for the local economy. Chicago needs to focus on the out of state and international companies.