Chicago’s Business Leaders Collaborate to Create, Invest and Manage the $10 Million Illinois Innovation Accelorator (i2A) Fund
Today, the Illinois Innovation Accelerator (i2A) Fund, a $10 million seed-stage, for-profit investment fund, was launched with $6.4 million in capital commitment in its first closing. Seed-stage investing has decreased since the start of the new millennium as investors have moved "up-market," leaving a "capital gap" in their wake. The i2A steps up to the plate as the state's most innovative for-profit, early-stage investment fund.
Structured as a member-managed fund with individual and institutional investors, the i2A Fund (www.i2Afund.com) will be administered by the Chicagoland Entrepreneurial Center (CEC), a non-profit affiliate of the Chicagoland Chamber of Commerce, with a strong track record in early-stage financing. Notable venture capitalist J.B. Pritzker, of New World Ventures, as well as the Illinois Department of Commerce and Economic Opportunity (DCEO) played an active role as the early catalysts in the formation of the i2A Fund.
"The i2A Fund in and of itself is an entrepreneurial initiative. It was created and funded by several of Illinois' most successful entrepreneurs to invest in the future of our local economies and the next generation of pioneering entrepreneurs," said David Weinstein, president of the Chicagoland Entrepreneurial Center. "Illinois' entrepreneurs stand to benefit not only from the funding, but also the invaluable knowledge and resources that each investment and advisory committee member brings to the table – such as guidance and connections to target customers, partners and key members of the management team."
The fund wasn't created solely for technology companies, but rather to drive invention across multiple industries. The fund will also invest in consumer product and retail enterprises, new-media start-ups, as well as companies in biotechnology, nanotechnology, cleantechnology and life sciences.
"This fund is truly unique and I hope that when other venture capitalists and private equity firms see the success of it, they will begin sowing the same seeds and similar funds will be popping up all over the place," noted Michael Ferro, a well known Chicago entrepreneur, who was founder of Click Commerce and is also an investor in the i2A Fund.
The i2A Fund will create a vehicle to support an innovation-based economy. The primary goal of the fund is to provide the first external capital raised by companies headquartered in Illinois, allowing them to expand, as well as provide fund members the opportunity to capitalize on these high-growth opportunities.
"The challenge we have in Illinois is that we have not yet developed a strong enough culture of seed-stage support for start-up companies," said J.B. Pritzker, founder and partner of New World Ventures and chairman of the i2A Investment Committee. "Many start-ups in Illinois fail because they are unable to find the early capital necessary to succeed at that vital embryonic stage. The i2A Fund is an effort to give entrepreneurs a jump start. Through the fund and the support of business leaders, we are giving them a place to go; kind of a helping hand for these motivated entrepreneurs."
Each year, the i2A Investment and Advisory Committees expect to evaluate between 150-200 investment opportunities and invest in four to six companies that are headquartered in Illinois and the surrounding region.
"Illinois Institute of Technology is dedicated to innovation beyond the classroom. The i2A Fund supports this initiative, and serves as our strategic investment partner," commented Lewis Collens, president of IIT. "University Technology Park on our campus is designed to serve start-up and high-growth companies, and will also function as a resource for portfolio companies of the fund."
The state's investment comes from DCEO's Illinois Seed/Angel Fund, which is investing in other seed stage venture funds across Illinois. Gov. Rod R. Blagojevich has invested almost $2.7 million from this fund in four Illinois-based venture funds, which are already investing in emerging companies throughout Illinois. These investments not only work to help small businesses expand and create jobs, but will also help to keep these high-growth companies in the state.
"Since entrepreneurs are the backbone of our economy, nothing is more essential for them to develop successful new companies than early stage capital. By investing in the i2A Fund, Gov. Blagojevich and I are helping to address a critical shortage of this type of financing and continuing to build a business environment that encourages innovation. This is going to turn promising ideas into promising companies and create new, high-paying, Illinois jobs," DCEO Director Jack Lavin said.
The CEC has a great deal of experience in financial transactions, deal syndication (with its CEC Venture Forum) and post-deal development. The organization has assisted entrepreneurs in raising more than $40 million in debt and equity in the past four years with a focus on assisting clients in raising equity capital in amounts ranging from $100,000 to $3 million.
The first close of the i2A Fund included individual investors Michael Ferro, Jr., Bob Geras (chairman of the advisory committee), James Gray, Jules Knapp, Larry Levy, J.B. Pritzker (chairman of investment committee) and Ralph Wanger. Contributing institutions include: Cardinal Growth Corp., Duchossois Technology Partners, the Illinois Department of Commerce and Economic Opportunitiy, Illinois Institute of Technology, Merrick Ventures, Mesirow Financial, National City Equity Partners and Wexford Science and Technology.
For more information on the Illinois Innovation Accelerator Fund, please visit www.i2Afund.com.
Media Contact:
Jennifer Mussman
Edelman for the Chicagoland Entrepreneurial Center
312-233-1244
Jennifer.Mussman@Edelman.com
About Illinois Institute of Technology
Illinois Institute of Technology, also known as Illinois Tech, is a private, technology-focused, research university offering undergraduate and graduate degrees in engineering, science, architecture, business, design, human sciences, applied technology, and law. One of 16 institutions that comprise the Association of Independent Technological Universities (AITU), Illinois Tech offers exceptional preparation for professions that require technological sophistication, an innovative mindset, and an entrepreneurial spirit.
