Buzzy mega-rounds and high-profile IPOs often dominate headlines. But many of those companies were once early-stage and scrapping to raise a seed round.
Today, Chicago Ventures, a VC firm that often leads seed-stage rounds, announced the close of its third fund — a $63 million vehicle that it’s already put to work.
Chicago Ventures (which is based in Chicago, where else?) has a very specific set of criteria when it looks to back companies. For one, as mentioned, it not only wants to back seed-stage startups, it usually leads those rounds. The firm is targeting 25 investments out of its new fund with an average check size of $1.5 million to $2 million.
As evidence, it has so far backed 11 companies out of this third fund, leading 10 of those rounds. The startups include CognitOps, CoPilot, Forager, Interior Define, NOCD, OneRail, PreFix and Ureeka.
The firm also is focused on investing in companies located out of the traditional hotspots of Silicon Valley and New York. Six of its most recent investments were in Chicago-based startups, two in Austin (where it recently opened an office), one in Orlando, Florida, and one in Los Angeles.
Chicago Ventures prides itself in identifying, and backing, “overlooked” companies. It was founded in 2012 under the premise that enduring companies could be built “anywhere” and not restricted to “a few select area codes.”
“Only a handful of funds consistently lead seed rounds. Tag-along, momentum-based investing is the norm,” the firm said in a statement. “The industry’s attention still converges on industries and geographies with rich histories of innovation. We fill these gaps. We lead seed rounds before it’s obvious, and serve as active, operationally-involved partners during a company’s earliest days. We invest off the coasts.”
Since its inception, the firm’s portfolio companies have raised more than $1.5 billion in follow-on capital. Seventeen of those companies are now valued over $100 million, including Cameo, business software marketplace G2 and logistics software company project44.
Chicago Ventures closed its second fund in 2016 — which included a $60 million main fund and a $6 million sidecar fund. The firm opted not to go the sidecar route this time around.
In conjunction with the new fund, Chicago Ventures also announced that it has promoted Peter Christman and Lindsay Knight to partner. Christman leads investments in companies rebuilding old-line enterprise workflows and consumer products expanding access to care and financial well-being. Knight leads the firm’s post-investment operations, including talent, business development and functional best practice sharing.
Chicago Ventures has also named Jackie DiMonte to the team as a new partner. DiMonte comes from Hyde Park Venture Partners, where she led early-stage, enterprise investments. An engineer by training, DiMonte is based in Austin, where Chicago Ventures has made 10 investments since 2015.
In 2020, the dollars invested into seed-stage startups in the United States had an up-and-down year that TechCrunch explored in this piece. Also, the pattern of rising seed-check sizes seen in prior years continued, despite the tumultuous business climate.