When Groupon went public in 2011, excitement was abound that the “unicorn” exit would be the beginning of a startup and venture capital renaissance in Illinois and even the larger midwest. Alas, that did not happen but that doesn’t mean there is not growing activity in the area. Specifically, we wanted to analyze the early stage investors who are actively investing in midwest companies and assess them based on their ability to get their portfolio companies follow-on financing.
Below is a list of the most active investors who invested in the early stages of midwest-based tech startups, from the start of 2004 through to November 2012. During this period, there were 9 venture capital investors that made an early-stage investment (Seed/Series A) in 5 or more unique startups. Lightbank tops the list, followed by Pritzker Group Venture Capital and Jumpstart. Because we are looking at follow-on rates and our earlier Seed Investing Report showed that VC-backed companies need 13 months on average to get follow-on financing, we excluded companies receiving financing after November 2012.
Of the 9 most active investors, Detroit Venture Partners leads the most active midwest investors by early-stage follow-on financing rate, followed by Pritzker Group Venture Capital and Apex Venture Partners. Detroit Venture Partners has backed a number of emerging midwest startups that have received follow-on backing including Stik and Marxent Labs. However, it’s worth mentioning that the most active investor, Lightbank, has participated in as many as 4x more early-stage deals during the period as some of the other investors on the list and so the reduced follow-on rate is influenced by this. To track tech startups and their investors in the midwest, login to CB Insights or create a free account below.