The lack of venture capital firms in Chicago can make it tough for local companies to find investors, according to Farmer’s Fridge CEO Luke Saunders, whose Chicago-based company sells salads and other meals from vending machines. Since the pool of capital available in the city is insufficient to help some startups reach the next level, local executives are appealing to venture capitalists on the coasts. Farmer’s Fridge closed a $30 million financing round last month led by Innovation Endeavors, a venture capital fund co-founded by former Google CEO Eric Schmidt. Other high-profile coastal venture capitalists have homed in on Chicago’s startup scene as well. AOL co-founder Steve Case launched an investment firm called Revolution in 2005. In the last several years, its Revolution Growth fund has made numerous investments in serial entrepreneur Brad Keywell’s data analytics company Uptake Technologies and Tempus, a cancer-fighting startup from another well-known Chicago entrepreneur, Eric Lefkofsky.
It’s not just the fast-growing, big-name tech companies in Chicago that have attracted the attention of the investment firm, though. J.D. Vance, author of New York Times bestseller Hillbilly Elegy and managing partner of Revolution’s Rise of the Rest Seed Fund, said they are looking for companies with products or ideas that are still being developed and which coastal investors are not paying attention to yet. “As advanced as Chicago is, we still think that the quality of the entrepreneur outweighs the access to capital, so there’s a real opportunity for investors like us to come here, spend time here and meet some good companies here,” Vance said.
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