Menu

Chicago

America’s third largest city has shed its traditionally corporate image for a more entrepreneurial look – with wildly successful ventures like Groupon and Grubhub leading the way. The grassroots startup movement has been supported by groups like 1871, the city’s most prominent tech startup hub. World-class universities like Northwestern and the University of Chicago make top talent plentiful, while the legacy of Motorola permeates the city with tech expertise. However, the youth of the startup environment and the relative scarcity of capital, perpetuated by a kind of Midwestern fiscal conservatism, still makes funding more difficult than in top-tier cities. Finally, the lack of media coverage impedes recognition and branding for Chicago startups.

In This Market

These businesses offer industry expertise and are a source of startup talent and potential customers. They help fuel the local startup community.

Opportunities

  • Chicago is the largest city within the Big 10 school network. Additionally, there are excellent universities in Chicago, such as Northwestern and the University of Chicago, meaning that there is an ample supply of talented young people.
  • Mayor Rahm Emanuel is very supportive of the tech industry and has overseen the city’s first comprehensive technology plan.
  • Traditionally the corporate headquarters of the midwest, the Chicago attracts some of the best business talent in the world.
  • The startup scene in Chicago is booming, with a startup being launched every 24 hours as of 2012.
  • Chicago VC-backed startups have a higher return on investment than startups in any other hub. Almost 81% of Chicago exits measured had a 3x to 10x return, 10% higher than the Bay Area. With 45% of exits generating a 10x return, the highest proportion of any startup hub.

Risk Factors

  • Many people who would otherwise work for a startup join major corporations, making finding talent challenging.
  • The City of Chicago is facing an enormous budget shortfall that may force the city to declare bankruptcy in the coming years.
  • Due to the location of many traditional industries such as retail, finance, and agriculture the investor mindset is very conservative
  • Illinois has been increasing taxes in the past few years, and is ranked as having the 9th highest tax burden of any state.
  • The city’s notoriously difficult weather conditions, long commutes, and violent neighborhoods negatively affect its quality of life.
Methodology

Market Indicators

Notable Success Stories

Funding

Key players

Market timeline

Suggest a change