1871, the city's leading tech startup center, will announce Tuesday a dedicated incubator for female entrepreneurs, funded by Google, Motorola Mobility and the Lefkofsky Family Foundation, which is run by Liz Lefkofsky, the wife of Groupon's chief executive.
Women face hurdles in the tech startup world, in which they are underrepresented among leaders and often feel marginalized by a male-dominated culture. There have been more discussions in the entrepreneur community in Chicago and nationwide about recruiting and nurturing female talent. The 1871 incubator would be the first of its kind in Chicago.
Howard Tullman, 1871's chief executive, did not disclose the size of the corporate and philanthropic donations. Instead, he said this and other "verticals" to come at 1871 will operate on $500,000 to $1 million in annual funding. Future incubators will be dedicated to financial technology, education technology, hospitality and product/gadget designers, he said in an interview.
"What we have found at 1871 is that if we embrace specific verticals and natural areas of growth, we can help our companies achieve much more than they might have on their own," Tullman said in a news release. "Critical mass creates an environment of support, shared experiences and cross-pollination that significantly accelerates the development of powerful ideas."
The full complement of resources that will be directed at these 10 to 15 women-owned startups, which has been dubbed 1871 FEMtech, has not been spelled out. But Tullman said it will involve a dedicated space within 1871, a full-time staffer/mentor, midday programming to suit mothers' schedules and "something around child care or day care."
Tullman expects that 1871 will begin accepting applications for the program in June, and it will start in the fall. 1871 hopes the program will draw participants from around the world.
"This initiative is critical to the success of Chicago's tech infrastructure," said Genevieve Thiers, founder of SitterCity. "We have enormous untapped female talent in this market and nationwide that could be tapped with some simple changes in the way that we support and train our female entrepreneurs. I look forward to seeing that talent unleashed."
The incubator will be part of Google's #40Forward initiative, which argues that women-led tech companies achieve higher returns and, when venture-backed, bring in more revenue than male-led peers. Yet women are still underrepresented in the tech community and receive only 4 percent of venture capital, according to Google's website.
"The current accelerator models are not attracting and advancing enough women-led startups, and 1871's new program will help reach these women," Bridgette Beam, global manager of Google for Entrepreneurs, said in a news release.
While any effort to improve those numbers is laudable, Google is committing only $1 million to these 40 organizations, while the company was worth more than $407 billion as of Monday. Still, Tullman argued that these startups will be able to tap into "Google's marketing arm as well," providing a soft benefit and public exposure that no budget can capture.
"There are accelerators, incubators and co-working spaces," Tullman said. "An accelerator takes an economic interest in its member businesses. We will not be doing that. On the other hand, we'll be supplying far more support and resources to these groups in the way of special tutoring and mentoring than any traditional sort of co-working space."
Financing a studio
Billionaire Chicagoan Gigi Pritzker doubled down on the movie industry Monday, announcing that she would help finance a new movie studio with fellow producer Robert Simonds, private equity firm TPG Capital and China's Hony Capital that would release as many as 10 films a year.
The studio, the name of which was not announced, aims to set itself apart from its bigger rivals by filling in territory they have abandoned, self-distributing the films and tapping Chinese investors, presumably with the aim of tapping Chinese audiences as well.
Pritzker, who through a spokesman declined an interview, will serve on the company's board. The amount of her investment, which will come in the form of equity and debt, was not disclosed. Simonds will lead the effort.
"I am confident in Bob's vision for this company and the partnership he has assembled," Pritzker said in a news release. "I look forward to seeing it thrive. As both a filmmaker and an investor, I look forward to finding strategic opportunities to work with him on upcoming projects."
Pritzker is a member of one of Chicago's wealthiest families, which founded the Hyatt hotel chain. After a dispute over money and control, the family broke up its empire, selling off holdings and dividing its stake in Hyatt.
The sales meant family members were sitting on enormous piles of cash and had the freedom to spend without consulting relatives.
Pritzker has long been an investor in theater and film, having founded her own production company, Los Angeles-based OddLot Entertainment, in 2001. She is best known locally for "Million Dollar Quartet," which became the longest-running musical in Chicago history in May and was nominated for a Tony Award for Best Musical in 2010.
OddLot is not involved in this new venture. It recently began a multiyear, multipicture co-financing and distribution deal with Lionsgate. Under that agreement, it is slated to release Ivan Reitman's "Draft Day," starring Kevin Costner, on April 11. Independent of the Lionsgate deal, it is producing Jon Stewart's directorial debut, "Rosewater."
Its most expensive release, "Ender's Game," released in November, was a financial failure, grossing $112 million worldwide on a $110 million budget. Budget figures omit the sizable amount spent on marketing a film.
By comparison, this new company will seek to release films with approximately $40 million budgets featuring big-name stars, filling a territory most studios have abandoned. It expects to invest $1 billion in new productions during the next five years.
Adopting the business model of larger established studios, it will be a distributor of its films as well, having inked distribution agreements directly with four of the biggest movie theater chains in America: AMC Theatres, Regal Entertainment Group, Cinemark and Carmike Cinemas. According to The New York Times, those agreements guarantee nationwide screen time for up to 10 films a year.
Another key part of its strategy is China's Hony. SMG (Shanghai Media Group) Pictures is in its investment portfolio. According to the Times, SMG has forged deals with other American studios to develop movies for the Chinese market.
"We wanted this to be blue-chip, strategic money, and not just some guy writing a big check," Simonds told the Times.
Still, even the best business strategy will not insulate anyone from flops. And the risk rivals venture capital, in which conventional wisdom goes that only 1 out of every 10 startups will succeed. Similarly, among the most difficult creative achievements is crafting a piece of entertainment that a lot of people want to watch.
Tribune reporter Nina Metz contributed.