Tuesday, May 23, 2023

Opinion: A Chicago-centric angel investor's message to the new mayor

 Opinion: A Chicago-centric angel investor's message to the new mayor

By Christopher Deutsch

 

May 23, 2023 11:26 AM

Dear Mayor Brandon Johnson:

Congratulations on your recent election. Although I did not vote for you, you have my support as someone who loves our city and is actively investing in its future.

I am a “first-check” angel investor in Chicago-based startups, providing several million dollars of my own capital to companies at their earliest stages. Three-quarters of the 83 companies I have backed are led by underrepresented founders. I choose to focus on our local entrepreneurs because I understand the economic impact of concentrating my capital here, rather than in Silicon Valley or elsewhere.

My goal is to help our founders build successful businesses, while adding thousands of jobs to the local economy.  Many of these homegrown entrepreneurs will become successful enough to create meaningful financial outcomes for their families and employees, who may then reinvest their capital into new local startups, creating a local economic flywheel.

There are already specific examples I can point to, including Cubii, which was sold for $100 million in 2020 and whose founders are now actively investing in Chicago startups led by underrepresented founders. This is a viable long-term strategy that admittedly will take decades. For it to work, we must move quickly to make Chicago competitive once again, so residents choose to stay and others are enticed to move here from elsewhere.

­The pandemic has caused us all to ask ourselves big questions about where and how we work: “Why am I at this job?” “Do I enjoy what I do?” But there is one pervasive question I am hearing again and again from founders that is critical to Chicago’s future: “If I can work from anywhere now, why am I living here?”

This question is actively being asked by other business leaders, too, whether they already live here, such as CME Group CEO Terry Duffy, who just publicly shared his concerns, or those who might consider moving here. 

More people will be asking themselves that question in response to proposals like those contained in “First We Get the Money,” or calls to defund public safety and ignore the fiscal peril facing our city. 

Our entrepreneurs do not have to be here. They choose Chicago because it is an amazing city with award-winning restaurants, vibrant neighborhoods, world-class universities, robust infrastructure, gritty workers and a reasonable cost of living.

But we are at the precipice of a mass exodus of our best and brightest entrepreneurs and their employees. These vital individuals increasingly are looking to set down roots elsewhere as they seek safer streets, lower taxes and better-functioning local government. Unless we become more competitive, our city is going to lose the very entrepreneurs we desperately need here.

They are our next generation of CEOs who eventually will lead Fortune 500 companies and invest their own dollars, as I do, into our future founders.

If we lose them and the jobs they represent, while scaring off the CME Groups and prospective corporate entrants before they even sign leases, will our city be viable five, 10, 20 years from now? Or will we succumb to the same rapid decline and deindustrialization Detroit experienced?

We cannot let that happen. The risk of losing our status as a world-class city is real, so it is urgent that we work together to craft rational and realistic near-term and long-term solutions to these problems because, in this post-pandemic paradigm, it has never been easier or more attractive to move to other cities than it is right now.

Sincerely,

Christopher Deutsch

Christopher Deutsch is founder of Lofty Ventures in Chicago. He is also founder of Lofty Angels, which helps people learn angel investing.