12/1/2016 Andrew Hayward 7 min read
Written by Andrew Hayward
Although it's 135 miles away, the University of Illinois at Urbana-Champaign is responsible for developing the most entrepreneur alumni in the greater Chicago area. LinkedIn data showed as much earlier this year, putting UIUC ahead of DePaul and Northwestern. Meanwhile, a recent report by venture capital database Pitchbook affirmed that the school produces the most undergraduate venture-backed startups out of any Illinois university.
Max Levchin of PayPal, Larry Ellison of Oracle and Marc Andreessen of a16z are among UIUC's more famous alumni who have left Illinois for Silicon Valley. But U of I pumps plenty of talent into the Chicago startup and entrepreneurial ecosystem, and it's a self-sustaining and gradually expanding loop: many founders leave the school and stay in the area, growing Chicago as a tech hub in the process, and then repay the favor by investing in or mentoring UIUC startups. And Chicago's top VC firms likewise feature many UIUC alums, who remain plugged in and pour funding into student, alumni, and teacher-created startups.
Here's a look at what UIUC and its students and graduates are doing to build these mutually beneficial ecosystems, how to connect with UIUC-spawned startups, and which alumni VCs are helping to bring these teams to the forefront.
Community building
Urbana-Champaign's focus on startup education and community has grown substantially in recent years, as Ali Afridi witnessed firsthand--and furthered along himself. The UIUC computer science alum (his degree is still pending a few course credits) is now working as a VC analyst at Lightbank in Chicago (their youngest hire in that position, yet), but during his first year on campus from 2012-13, "I didn't feel like there was a very strong startup community," he says.
That quickly started to change and the Founders student entrepreneurship organization started turning the tide. Afridi helped establish related events, including the 54 startup weekend event and Startup Bootcamp accelerator program. Meanwhile, UIUC began expanding its own slate of entrepreneurship-focused programs and resources, many of which rely on alumni help from within Chicago's startup ecosystem.
Jed Taylor, director of operations for UIUC's Technology Entrepreneur Center and Entrepreneur in Residence at the school's EnterpriseWorks incubator, points to a number of initiatives that the school has to help plug students into the Chicago startup scene. There's an alternate spring break program with the Pritzker Group to connect student teams with Pritzker-funded startups and a partnership with the Polsky Center at the University of Chicago to tap into its resources. EnterpriseWorks also has a partnership with Chicago healthcare startup incubator Matter to allow the school's biotech startups to use the Chicago incubator's resources and space. The iVenture Accelerator also nurtures UIUC student startups and shares their products with the Chicago community, including via demo day events.
Meanwhile, UIUC's Cozad New Venture Competition provides funding to student startups. Fitness wearable software maker Rithmio won the competition in 2014 and soon thereafter received $650,000 in investments from Chicago-based VCs like Hyde Park Angels, Hyde Park Venture Partners, OCA Ventures and serial entrepreneur Mark Tebbe.
Noted alums like Craig Vodnik of Cleverbridge and former Hyde Park Angels managing director Karin O'Connor serve as entrepreneurs in residence, while alumni including Tebbe, Vodnik, and ShipBob co-founder Divey Gulati have returned for speaking engagements in classes or at EnterpriseWorks. "We see more success, and we see more people stick around after they've had successes and give back to the community," says Taylor of the UIUC startup scene and its ties to Chicago. "It just feeds on itself. That's been one of the reasons we're starting to have more success now."
Connecting in Chicago
Given UIUC's growing reputation for breeding startup talent and past success stories, it's no surprise that many Chicago-based startups have either been started while students are still attending or founded by alums.
Besides Rithmio, some other startups that have made the jump from Urbana-Champaign to the greater Chicago area include medical device companies Diagnostic Photonics and PhotoniCare, janitorial inspections app maker Orange QC, Tiesta Tea, smart oven maker Tovala and video app platform Personify. And there are other Chicago-based startups that have one or more alumni founders--Avant, Foxtrot and Fooda, for instance.
For graduates who are founding or working at startups, or are interested in working with UIUC alums at Chicago companies, a meetup group is trying to bridge the gap between the school's efforts and the local scene. Founded in 2013, Illini Startupshas more than 580 members and hosts monthly events with local startup founders and figures. A recent Illini Startups panel on raising VC funds featured Avant co-founder John Sun, Fooda founder Orazio Buzza and Promus Ventures vice president Julian Cheng.
Colin Lateano, a marketing consultant and 2013 UIUC graduate, was inspired to co-found the group after starting a company out of school and failing to find local support here. "I didn't really have a good network in Chicago to talk to about running a small business and being entrepreneurial," he says, relating his own experience of feeling lost in the Chicago startup scene after graduating. He adds that the U of I connection makes members more appealing to fellow startup founders and entrepreneurs who may be seeking help.
"Once you come from U of I, you feel a shared connection to the community," adds Lateano, who is now working with startup dscout after a stint at Mabbly. "Because U of I has such a strong business and engineering program, you come to trust that these people have the talents to help you succeed and help businesses succeed."
On the school side of things, Taylor notes that alumni can take advantage of resources via EnterpriseWorks in Urbana-Champaign, as well as reach out to the university to stay connected with UIUC's entrepreneurial efforts and stay abreast of alumni events in and around Chicago.
Engaged alumni VCs
Unsurprisingly, many UIUC alums have found their way into Chicago's top VC firms and they're paying close attention to the school's growing entrepreneurial ecosystem.
Jeff Carter, principal at West Loop Ventures, is a UIUC alumni VC, along with Cleverbridge's Vodnik and Scott Rose at Hyde Park Angels (which Carter co-founded). Hyde Park invests 80% of its funds in the Chicagoland area. Co-founder and principal Steve Miller of Origin Ventures is another alum, along with Ian Drury of OCA Ventures, Afridi at Lightbank, and both Jackie DiMonte and Ira Weiss of Hyde Park Venture Partners.
A couple of big VCs in the Urbana-Champaign area are also investing heavily in startups out of the school, many of which end up in Chicago. Serra Ventures has alums like Dennis Beard, Rob Schultz and Tim Hoerr, and the firm has invested in startups like Rithmio and Personify.
Meanwhile, IllinoisVentures, which has offices in Champaign and headquarters in Chicago, is entirely focused on investing in and supporting startups out of the entire University of Illinois system. Alums like Nancy Sullivan, Tom Parkinson and Chase Bonhag oversee about $65 million in assets under management, and work with startups from students, alumni, and faculty alike.
"The University of Illinois is launching more startups than anyone outside of our entrepreneurial ecosystem can comprehend," says Bonhag, an associate. "The more involved a UIUC startup is with the entrepreneurial ecosystem on campus, the more likely they are to end up in Chicago. Startups involved in the UIUC entrepreneurial ecosystem are frequently meeting with alumni, entrepreneurs, investors and customers in the Chicago area thanks to the efforts of the Champaign ecosystem to ensure they have those opportunities. The results of these efforts are a major factor in planting the seed for a move to Chicago."
And as Afridi affirms, Chicago VCs are now increasingly tuned into Urbana-Champaign as its startup culture surges: "Pretty much any VC firm that's in Chicago already has a presence on campus, or is establishing a presence on campus."