Vijen Patel said he pitched nearly every VC firm in the Midwest in 2013 when trying to raise money for his startup Pressbox, an on-demand dry-cleaning service. He heard the same thing over and over: The dry-cleaning space was too capital intensive and too difficult to scale.
So Patel and his co-founder Drew McKenna bootstrapped the business. Patel poured $120,000 of his own money into the startup, which expanded its dry-cleaning drop-off lockers to hundreds of locations across the country by 2018. It was then that Procter & Gamble took notice, acquiring the Chicago startup that July.
Now, Patel has launched a new VC fund that aims to back startups in other "boring" industries that often struggle to raise venture funding. Called The 81 Collection, the fund is named after the notion that 19% of GDP attracts more than 50% of venture capital activity, Patel said. The 81 Collection is going after the other 81%.
Founded in January, the fund has so far raised $20 million. It plans to ultimately raise $40 million for its debut fund, Patel said. It's targeting startups in sectors like retail, real estate, manufacturing and energy.
"We’re focused on the 81% of the economy that isn’t as VC backable in today’s terms. We think there’s a giant void there," Patel said. "We want to help these entrepreneurs that are taking this hard path, and make it easier for them."
The 81 Collection aims to be a startup's first check, investing $250,000 to $500,000 in pre-seed and seed rounds. The fund has backed five startups to date, including Parentaly, a Chicago workplace benefits startup that helps companies and employees with parental leave.
Led by Patel, Alex Kirshenbaum and Ariana Soto, the fund's advisors also include founders of well-known local startups such as ShipBob, Farmer's Fridge, Grubhub and Protege. The 81 Collection joins other founder-led VC funds that have launched in Chicago recently, including LongJump and Fifth Star Funds.
