February 12, 2013
J.B. Pritzker, the billionaire venture capitalist whose family founded the Hyatt hotel chain, called on corporations to work more closely with startups and become more familiar with the city's growing technology sector.
"By definition, startups are not constrained by the limits of established company culture," said Pritzker, speaking Monday at a City Club of Chicago luncheon. "And so they push boundaries and develop new technologies and ways of doing things. You should think of them as your R&D. They're very inexpensive R&D ... that is free from the shackles of your corporate bureaucracy."
Pritzker, who with his brother, Tony, runs venture capital firm New World Ventures and co-leads the mayor's innovation council, explained his rationale in economic terms, thereby avoiding the cheerleading often heard on Chicago's corporate lecture circuit.
"Don't do it for the startups, not even for Chicago, not for the mayor, not for me," he said. "Do it because it's good for your business, and you'll make more money doing it."
When a Chicago entrepreneur goes searching for someone to take a gamble on his fledgling website built on maxed-out credit cards, Pritzker is prospective investor No. 1. He is one of the longest-tenured venture capitalists in the city, and New World's portfolio includes more than 50 companies, including Sittercity, Power2Switch and GiveForward.
For those who aren't billionaires, Pritzker listed ways to get involved. Visit 1871, the co-working tech space in The Merchandise Mart that Pritzker founded. (Yes, you can just walk in.) Register with Built In Chicago, a Facebook-esque website for the tech sector. Join the Illinois Technology Association. Look up the Clean Energy Trust. Go to the BIO convention in April at McCormick Place.
He said the progress being made in Chicago's digital technology sector needs to spread to the biotech and clean tech sectors. Here, the region has juggernauts, such as Abbott Laboratories and Baxter, yet seemingly fewer startups.
After the approximately 20-minute speech, Pritzker was asked only one question: Will Illinois' financial and pension mess scare small businesses? Pritzker responded: "This isn't going to be an attractive answer to some of you, but no."
In a follow-up interview, Pritzker elaborated.
"I'm not suggesting entrepreneurs are immune to taxes, but I am suggesting that most entrepreneurs are driven in part by something other than money," he said. "And second, in the first few years of the life of a startup, they're typically not making money. ... As a result, (taxes) are not an impediment because there's nothing to tax."
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