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J.B. Pritzker: Chicago is tech hub but needs capital, young talent

Updated: December 5, 2013 3:47PM

Chicago has transformed from being a technological desert to birthing tech startups that have achieved more than $50 billion in collective market value — but it’s still a challenge to attract startup capital and to keep young talent from fleeing to Silicon Valley, venture capitalist and billionaire J.B. Pritzker said Thursday.

Local successes reflect “real companies with real revenue that focus on profitability,” but at the same time, a dearth of local capital exists for still-fledgling ideas, Pritzker said in a keynote speech to the CFA Society of Chicago, a group representing financial analysts and investment professionals that met at the University Club of Chicago.

He said as many as 24 other Chicago-area companies have developed far enough to consider or start plans to go public, and seven companies moved to Chicago to participate in Techstars, a business accelerator program.

Yet “staunching the outflow” of brainpower is essential to attracting more entrepreneurs to Chicago, Pritzker said. He said if Chicago could attract 10 percent of the estimated 60 percent of computer-science graduates from the University of Illinois who take jobs in Silicon Valley, any talk of a brain drain would abate.

Pritzker, who runs the Pritzker Group investment firm with his brother, Tony, also gave the audience some insight scoops on his investment philosophy.

J.B. Pritzker says even though Tony’s first reaction to technology venture capital investing was to liken it to “pixie dust,” J.B. said it requires the investor to be “a great evaluator of people,” and primarily the leaders at the top.

“The jockey is the most important thing in the horse race of venture capital,” he said. “Are (the leaders) flexible? How talented are they?

“There is a lot of deep diligence (required) that isn’t available in public investing or is very, very hard to do,” J.B. said.

Ultimately, the company worth the investment must be about creating efficiency, he said.


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