I wasn’t invited to knockNOW!, but I laude Mr. Meade’s efforts. The funding opportunities in Chicago are absolutely horrific. His comment, “What do you get from investment groups in Chicago? ‘It’s too early’. ‘We are going to take a pass, come back when you have customers, good luck.’ And then they pat you on the head and send you out the door,” is right on the mark!
Except for a few rare exceptions, there simply is NO seed-stage money in Chicago. I’m forced to prove my business model without seed-stage capital, which is difficult to say the least. I cannot overstate how many times I’ve heard the mantra, “It’s not the horse, it’s the jockey” just to find that potential investors spent no time learning about me — just examining whether my company is going to be the “next Yahoo!” (Did Yahoo! know it was going to be the next Yahoo!??) Not once, has an investor asked for my resume or referred me to an investor who might be interested in our opportunity.
Well, we’re generating revenue, winning customers and making a name for ourselves. Formally launching 8 weeks ago, we’re doing great work for our customers, but two events conspire against us: The IT professional services market is in the crapper (besides, the month of December is traditionally slow) and we found that our A/R has a 60- to 90-day turnaround (we assumed 30- to 60-day in our business plan). We might find ourselves out of business in the next 30 days, simply because we cannot find the seed/early-stage capital to help us manage our cash flow. If I went out of business, the city looses 6 jobs immediately, and the potential for a hundred.
I wish Chicago had more individuals like Stephen Meade, willing to spend extra time to make a difference.
Mr. Meade - You have managed to articulate what a lot of people have been thinking for quite some time. I applaud you for framing my feelings, something I was unable to do. We at Watercolor believe in Chicago and pride ourselves on positive, forward moving people. To you we say “amen!”
I liked your letter to Ron today – you and I have met a number of times here in Chicago at various events – I’d be interested in hearing more about what Knocknow is trying to do – I too (as well as our firm) am trying to move Chicago in the direction of the models of the coasts – among other things, I am one of the early contributors to Prairie Angels, a group formed for purposes of networking the angel community and providing a forum for seed/first round stage companies to present their business plans, with the hopes that they will obtain funding, advisors, etc. Please ask Rick Fumo about me and our firm, and let me know what might be a good time to get together, either for breakfast, lunch or whatever!
I commend you for the note to Ron May, and believe 3000% in what you are saying and trying to do.
If there is anything that I can do, please let me know. I am quite passionate about what you are doing, I would love to be a part of it in any way. Thanks for stepping up on this one, Steve.
I hope others were listening.
Where do you get the time to write such a long response to Ron? By the way, I agree with most of what you said but I do think there are more introductions going on in Chicago than either you or Ron (or other writers) imply. There is no question that there is room to improve, but I think we are above ground zero. Good luck with your new organization.
I apologize as I’m sure that this message only adds to an already full mailbox, but I felt compelled to send you a note regarding your letter to Ron May.
First of all, and I believe that all Chicago entrepreneurs will agree with me when I say this, you couldn’t have captured our frustration with The May Report and the Chicago tech community (and I use the term ‘community’ loosely) more accurately. It was actually the first piece of journalism in TMR that I read word-for-word. Thank You!
As a start-up seeking funding ourselves, you’re absolutely right in saying that “our local VCs’ idea of a seed stage investment is a company that is up and running, with a client base and some proof of concept.” It’s exactly what we were told when we started floating our business plan. “Go away, come back later.” The problem with this philosophy is that it takes time and money to meet these milestones, two commodities that pure start-ups don’t have enough of. If we don’t get support, we die. If Chicago wants to hit “homeruns” that we can all be proud of, we need to start stepping up to the plate. And right now, KnockNOW is on deck!
Finally, if you believe in your convictions, and if KnockNOW is looking for the perspective of “three guys in a garage”, (or in our case, loft), give us a call. We like contributing to organizations that makes a difference.