A group of Chicago startup founders is pooling together their resources and raising a new fund as they look to invest in the next generation of Chicago tech entrepreneurs.
LongJump, which calls itself a “first-check” fund, officially launched on Thursday after several months of fundraising. The founders would not disclose the size of the fund, citing U.S. Securities and Exchange Commission regulations, but said the firm intends to write checks ranging from $50,000 to $100,000. These check sizes are designed to help fill the funding gap that many early-stage entrepreneurs in Chicago encounter.
The firm will invest in pre-seed technology and software companies based in Chicago, and source deals through an application process on its website. The firm’s founders said they won’t have any specific metrics or traction required to land an investment from LongJump, an ethos intended to give founders funding at the earliest stages and replicate the "friends and family" round.
The LongJump team consists of six well-known Chicago entrepreneurs, who have each put their own money into the fund. They include Draftbit COO Tim Grace; Rheaply founder Garry Cooper; 4Degrees co-founder Ablorde Ashigbi; Draftbit co-founder Brian Luerssen; Paladin co-founder and COO Kristen Sonday; and A.M. Money co-founder Daniel Rogers.
But the firm’s list of more than 100 limited partners has even more familiar faces. Notable LPs include Relativity CEO Mike Gamson; BuiltIn co-founder Maria Katris; Equilibria co-founder Coco Meers; Ocient founder Chris Gladwin; and G2 founder Godard Abel.
“If you’re looking at our LP list, it would look more like an 1871 alumni wrap-up than the who’s who in the venture community,” said Cooper, whose startup Rheaply has raised more than $10 million to date. “We’re super proud of catalyzing a whole new generation of investors as well as founders.”
While LongJump’s founders and LPs are some of the most well-connected figures in Chicago’s tech industry, Grace said the firm created an application process to make sure the deal pipeline includes entrepreneurs that don’t already have a connection.
“We really want to make this as democratized as possible,” Grace said. “There is a true gap at the earliest stages of backing founders. As founders and operators ourselves, we’ve gone through this process and felt various levels of pain in doing so.
“We can be the ones who have conviction to step in and back those founders, who didn’t necessarily come from backgrounds of privilege and don’t have a lot of personal wealth to get through those really early, sticky, experimental phases of figuring out your business,” Grace continued.
Having capital available to founders without existing personal wealth not only allows more diverse founders to enter the startup industry, but also provides a sturdier path for younger entrepreneurs working on their first business. LongJump's name reflects what it is like to launch a successful company on your own, the founders said.
“It is a long jump to start a company, especially if you’re starting a company and you don’t have a network,” Cooper said. “We want to help more great founders and professionals take that long jump with the network that we have in Chicago.”
LongJump is just one of several new funds that have been recently raised in Chicago. Cleveland Avenue, a venture capital firm from former McDonald’s CEO Don Thompson, announced its $70 million fund for food entrepreneurs earlier this week, as did Chicago Ventures, which raised $63 million for its third fund to invest in early-stage startups.
Additionally, Chicago and San Francisco-based GSV Ventures closed its second fund at $180 million to invest in ed-tech startups on Wednesday. And local VC firm Lightbank, which has backed companies like Sprout Social and Reverb, announced last week that it raised $180 million for its second fund.
LongJump’s founder-led model is similar to another fund that launched late last month that’s also created and backed by startup entrepreneurs. The Midwest Fund, led by founders like Jennifer Fried, the founder of Chicago-based ExplORer Surgical and Lynsie Campbell, the founder of Pittsburgh-based ShowClix, aims to invest in early-stage startups across the Midwest. Similar to LongJump, the Midwest Fund also plans to write checks between $50,000 and $100,000.
“I am ecstatic about what’s happening in Chicago,” Cooper said. “We’re not making another Silicon Valley. We’re making it the best place for any type of founder—Black, white, woman or else—to start a company. It makes me want to start a third company. This is an exciting time to be a Chicago founder.”
