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Good for Twitter, not so good for the Chicago tech/startup scene. Dick was an inspiration to many local entrepreneurs, and the Feedburner exit is often cited as

Good for Twitter, not so good for the Chicago tech/startup scene. Dick was an inspiration to many local entrepreneurs, and the Feedburner exit is often cited as evidence that "it can be done here."

sachinag 17y ago
Yeah, but Brad Feld led Feedburner's B round. Matt McCall had to go to New World Ventures because he couldn't raise a fund at Portage. You can do anything anywhere, but your odds of success are much, much better on the coasts. The lawyers here have fucked me, the (few) investors here have toyed with me and left me hanging, and the actual number of people who can actually deal with startup culture (no, it's not "working 40 hours for a small company", asshole) is abysmally small. Tech Cocktail and the like are swamped with recruiters and "social media experts". There are successes, such as 37signals, PerkSpot, skinnyCorp, but almost all of them are bootstrapped. If you need money because you're doing interesting technical things, leave. I should have started my company in the Bay Area. It's too late for me. Save yourself.
- andrewparker 17y ago
  There's nothing about lawyers that requires geographic proximity. If you really dislike Chicago based lawyers, hire a lawyer out of a VC-specific lawfirm from SV or NYC.
  - sachinag 17y ago
    Yeah, I wish someone had told me this before. I just didn't know. However, one of the great benefits of Valley representation is the intros you can get to investors. Those investors tend to be local. Thus, the best situation is to be wherever your lawyers and the investors you wish to be introduced to are. (My Chicago-based counsel intro'd me to a few Chicago-based VC firms and no angels or seed groups. There are precious few of all three here.)
- mediaman 17y ago
  How have the lawyers fucked you? We've had a good experience with ours (McGuireWoods). And I've been able to raise a low seven figures in angel money in the area. Having said that, were I to do it all over again, I'd have to think harder about which region is appropriate, even though my business is not web-based.
  - sachinag 17y ago
    Not being web-based is most definitely in favor of Chicago. Here's a story that I think illustrates everything about Chicago: so a group of people decided to form a new angel group (http://www.hydeparkangels.com http://www.hydeparkangels.com). Got a lot of people together, associated with U of C, lots of smart, hardworking people. A little younger skewing than other "groups" (I use the term loosely because they're more social clubs since they don't actually invest) in town. What's their first investment? A company that makes automatic fucking card shufflers for home poker games. Yeah, if it's not a manufacturing model - $x input => direct $x+y output, good fucking luck. EDIT: The lawyers, combined, have charged me $60K for stuff that could easily have been done for $10K by an experienced firm in SF (as confirmed by a partner at a representative Palo Alto office of a representative firm). And $10K would have left me another $15K on the loan most good firms will do for a leveragable company targeting VC investment.
    - mediaman 17y ago
      I'm familiar with Hyde Park Angels and talked with them for a while. Never got any traction with them and kept getting pushed off for a pitch, for vague reasons. This was after we had reached >$1mm in annual sales. Now I know it was because of the card shuffler. I see what you're saying. Although my business isn't web-based, it is a media company that relies on advertising as a sole source of revenue. There were a lot of misconceptions and distrust about anything related to advertising. I've gotten the most absurd questions during pitch sessions. To the extent anyone invested, it was because there was personal trust. My challenge has been that most rich people here have, by and large, not made their money in "startups" (even more loosely defined than on HN). Many of them have made their coin in big corporate management, finance, or from family. That kills the investment ecosystem because they largely turn it over to their financial advisers, who have no reason to consider risky startups. Angel groups here are a joke. Our money came from getting to know people individually. Have you considered pulling up stakes and moving? Edit: on VC -- I have turned quite anti-VC since being here. I think it is because most of the VCs, when asked why they are in Chicago, tell you it is because they can get "great deals" on "desperate" companies. Even on the angel side, I've had to explain to people why EBITDA multiples are not an appropriate valuation mechanism for early stage ventures. And then they act like I'm trying to con them.
- tptacek 17y ago
  Costolo had also been starting companies here for a decade prior to Feedburner, all the way back to Burning Door. Strongly object to the idea that it's harder to find people to put in a 60-hour week in Chicago.
  - sachinag 17y ago
    I think it's different for an established company like Matasano where 1) there isn't the financial risk to the paycheck that characterizes a new startup (pre-funding) and 2) everyone around someone is working 60+ hours. The culture's already there. With a two- or three-person startup, the culture isn't all-encompassing. Each person makes the culture.
- bingaman_ 17y ago
  Don't forget Kickstarter and Everyblock. Chicago will be fine.
  - andrewparker 17y ago
    Kickstarter is Brooklyn-based, not Chicago based.
  - sachinag 17y ago
    EveryBlock already sold to MSNBC. Based on Adrian's note about trying to keep the site alive (http://blog.everyblock.com/2009/aug/17/acquisition/ http://blog.everyblock.com/2009/aug/17/acquisition/), I have to assume it was a buy/hire.
    - adrianh 17y ago
      EveryBlock is proudly staying in Chicago.
- deleted 17y ago
  [deleted]
j2d2 17y ago
It can be done anywhere. This news isn't even related to any of their startups, so there's no reason it should shake them, unless they're easily shaken, which speaks volumes if you ask me.
deleted 17y ago
[deleted]

Good for Twitter, not so good for the Chicago tech/startup scene. Dick was an inspiration to many local entrepreneurs, and the Feedburner exit is often cited as evidence that "it can be done here."

sachinag 17y ago

Yeah, but Brad Feld led Feedburner's B round. Matt McCall had to go to New World Ventures because he couldn't raise a fund at Portage. You can do anything anywhere, but your odds of success are much, much better on the coasts. The lawyers here have fucked me, the (few) investors here have toyed with me and left me hanging, and the actual number of people who can actually deal with startup culture (no, it's not "working 40 hours for a small company", asshole) is abysmally small. Tech Cocktail and the like are swamped with recruiters and "social media experts". There are successes, such as 37signals, PerkSpot, skinnyCorp, but almost all of them are bootstrapped. If you need money because you're doing interesting technical things, leave. I should have started my company in the Bay Area. It's too late for me. Save yourself.

andrewparker 17y ago
There's nothing about lawyers that requires geographic proximity. If you really dislike Chicago based lawyers, hire a lawyer out of a VC-specific lawfirm from SV or NYC.
- sachinag 17y ago
  Yeah, I wish someone had told me this before. I just didn't know. However, one of the great benefits of Valley representation is the intros you can get to investors. Those investors tend to be local. Thus, the best situation is to be wherever your lawyers and the investors you wish to be introduced to are. (My Chicago-based counsel intro'd me to a few Chicago-based VC firms and no angels or seed groups. There are precious few of all three here.)
mediaman 17y ago
How have the lawyers fucked you? We've had a good experience with ours (McGuireWoods). And I've been able to raise a low seven figures in angel money in the area. Having said that, were I to do it all over again, I'd have to think harder about which region is appropriate, even though my business is not web-based.
- sachinag 17y ago
  Not being web-based is most definitely in favor of Chicago. Here's a story that I think illustrates everything about Chicago: so a group of people decided to form a new angel group (http://www.hydeparkangels.com http://www.hydeparkangels.com). Got a lot of people together, associated with U of C, lots of smart, hardworking people. A little younger skewing than other "groups" (I use the term loosely because they're more social clubs since they don't actually invest) in town. What's their first investment? A company that makes automatic fucking card shufflers for home poker games. Yeah, if it's not a manufacturing model - $x input => direct $x+y output, good fucking luck. EDIT: The lawyers, combined, have charged me $60K for stuff that could easily have been done for $10K by an experienced firm in SF (as confirmed by a partner at a representative Palo Alto office of a representative firm). And $10K would have left me another $15K on the loan most good firms will do for a leveragable company targeting VC investment.
  - mediaman 17y ago
    I'm familiar with Hyde Park Angels and talked with them for a while. Never got any traction with them and kept getting pushed off for a pitch, for vague reasons. This was after we had reached >$1mm in annual sales. Now I know it was because of the card shuffler. I see what you're saying. Although my business isn't web-based, it is a media company that relies on advertising as a sole source of revenue. There were a lot of misconceptions and distrust about anything related to advertising. I've gotten the most absurd questions during pitch sessions. To the extent anyone invested, it was because there was personal trust. My challenge has been that most rich people here have, by and large, not made their money in "startups" (even more loosely defined than on HN). Many of them have made their coin in big corporate management, finance, or from family. That kills the investment ecosystem because they largely turn it over to their financial advisers, who have no reason to consider risky startups. Angel groups here are a joke. Our money came from getting to know people individually. Have you considered pulling up stakes and moving? Edit: on VC -- I have turned quite anti-VC since being here. I think it is because most of the VCs, when asked why they are in Chicago, tell you it is because they can get "great deals" on "desperate" companies. Even on the angel side, I've had to explain to people why EBITDA multiples are not an appropriate valuation mechanism for early stage ventures. And then they act like I'm trying to con them.
tptacek 17y ago
Costolo had also been starting companies here for a decade prior to Feedburner, all the way back to Burning Door. Strongly object to the idea that it's harder to find people to put in a 60-hour week in Chicago.
- sachinag 17y ago
  I think it's different for an established company like Matasano where 1) there isn't the financial risk to the paycheck that characterizes a new startup (pre-funding) and 2) everyone around someone is working 60+ hours. The culture's already there. With a two- or three-person startup, the culture isn't all-encompassing. Each person makes the culture.
bingaman_ 17y ago
Don't forget Kickstarter and Everyblock. Chicago will be fine.
- andrewparker 17y ago
  Kickstarter is Brooklyn-based, not Chicago based.
- sachinag 17y ago
  EveryBlock already sold to MSNBC. Based on Adrian's note about trying to keep the site alive (http://blog.everyblock.com/2009/aug/17/acquisition/ http://blog.everyblock.com/2009/aug/17/acquisition/), I have to assume it was a buy/hire.
  - adrianh 17y ago
    EveryBlock is proudly staying in Chicago.
deleted 17y ago
[deleted]

j2d2 17y ago

It can be done anywhere. This news isn't even related to any of their startups, so there's no reason it should shake them, unless they're easily shaken, which speaks volumes if you ask me.

deleted 17y ago

[deleted]