While Chicago’s tech ecosystem has seen tremendous growth in recent years, Lofty Ventures’ Chris Deutsch thinks that it could be just the beginning.
And one area he said where more work could be done is in angel investing.
That’s why Lofty Ventures launched its first syndicate in 2021, giving startup founders an opportunity to invest in one another, thereby creating a more self-sustaining tech ecosystem.
Led by Deutsch and Spencer Gordon-Sand, Lofty Ventures has invested in more than 130 founders at 74 companies, with five exits. Of the 74 companies that Lofty Ventures has invested in, 70% are led by underrepresented founders and 90% are in Chicago.
"I don't have Mark Cuban's money — I've got a couple million dollars that I've been deploying, and instead of spreading that around the world, I'd rather focus on here in Chicago, because if I do that, then I can actually make an impact in the local community," Deutsch told Chicago Inno.
However, whether it's finding a substitute for friends and family rounds for underrepresented founders, or just getting enough capital to take to pre-seed or seed rounds, there just aren’t enough people writing those checks, according to Deutsch.
He wants to change that with Lofty Ventures Syndicate.
“A big part of what I'm doing with Lofty Ventures is trying to help more people in the Chicago ecosystem become angel investors, because my criticism or gap with Chicago's tech ecosystem is we don't have enough people writing the initial checks,” Deutsch said. "The long-term goal is to build more angel investors, not just with the usual suspects that do investing, like doctors and lawyers and C-level executives, but let's get our founders investing in the next generation of entrepreneurs. That's what they do on the coasts."
Lofty Ventures launched its first syndicate last year, three this year, and plans to do four to six next year, according to Deutsch.
“Over a dozen of our founders, over 10% of the founders in the Lofty family, have already started learning how to angel invest, which makes them better founders because they’re starting to wear an investor hat,” he said.
From founder to investor
One Chicago startup that’s gotten involved in angel investing through Lofty Ventures Syndicate is Science on Call.
Now in 260 restaurants, up from 130 to begin the year, Science on Call provides 24/7 on-demand tech support for restaurants and closed a $1.6 million pre-seed round at the beginning of the year. Co-founder Luisa Castellanos said the plan is to launch a seed round in early 2023, though she won't only be looking for investment from others but will seek to make her own through Lofty Ventures Syndicate.
“I met Chris through the Chicago startup community, and when Lofty opened that up, I was really excited to participate to have the opportunity to invest in fellow founders and be part of their journey as well,” she told Chicago Inno.
Castellanos described the unique approach as a great way to connect with more founders and to test the waters as a first-time investor. The minimum requirement to participate in the syndicate is $1,000.
"We got here with the help of other founders and investors, and so paying that favor back is huge for us," she added.
