Why I Am Leaving The Board of Hyde Park Angels

Hyde Park Angels has been around since April of 2007. I was one of the co-founders, and I am the only co-founder that is still involved with HPA and consistently writes checks to deals that come through. I started HPA’s blog, Facebook and other things way back when and I really like what HPA is doing in social media to help educate the community. I hope you like it too. What I did was piecemeal. What the current team at HPA is doing is pretty amazing.

At a recent dinner, we were reflecting back. I recall the first meeting HPA ever had. None of the founders were “known” in the Chicago startup community-or really known quantities at all. Someone asked me a question. They asked, “Do you want to be like Silicon Valley?” I retorted immediately, “No. We want to invest in what Chicago and the Midwest is good at. We will invest in tech, but we will invest in businesses that have history here.” So far, we have. It’s a great lesson for anyone that has the desire to build a startup community in their hometown. Why is your city where it is? What makes it tick? Embedded in those two questions is the foundation of your startup community.

This past week, I stepped off the Hyde Park Angels Board of Directors. As the Grateful Dead said, “What a long strange trip it’s been.” At the start, we were an idea. Kind of like most good startups at the intersection of “crazy and might work”. Today, it’s much different. If you are a parent, you know what I am feeling. It’s awfully tough to let your baby go.

I think it’s extremely important to note that Hyde Park Angels is not that much different than the startups we fund. The initial vision was superb. But, we have changed a lot since we started. No one could have predicted how the group would evolve. It was the first group to develop a close relationship with one of the leading academic institutions in the world. It is one of the most respected groups in the United States. It’s also one of the more active angel groups in the United States. We continue to learn, grow and pivot. We live and breathe The Lean Startup.

In a lot of startups, they like to number employees. Employees identify themselves as “I was Googler number 403.”. If we did that at HPA, I was probably Angel #1. But, I never saw HPA as that kind of organization. No angel group should be that way. I am just a Hyde Park Angel.

This is truly the way I see it. Our angel group is only as good as our worst angel. Selfishly, our worst angel is a pretty damn good angel. Each and every member is vitally important to our group, and our startup community. They are all pretty darn cool people. If you scratch the surface of any Hyde Park Angel member and ask them what their story is, you will meet some incredible people with some incredible stories. The fact that someone would feel compelled to join a group that I had a big part in building makes me feel pretty happy. I think I appreciate every HPA member more than they know.

Every single angel we have is responsible for pulling on the rope. Because we are in the Midwest, most of the time we are pulling uphill. It’s hard work and it’s full of risk. We are making progress. HPA is who it is because of the members. I have spoken with plenty of local investors and funds of funds. They don’t invest in the Midwest because they don’t think it’s happening here. They are wrong, and the data I see proves them wrong. They are missing out, big time.

When we started the group, our first goal was to invest in great companies and make money. It’s a capitalistic enterprise. If you look at the HPA portfolio, I think we have invested in some pretty great companies. By the way, startups are like hunting dogs. Never tell your friend that their startup can’t hunt . HPA has had some exits, and some failures. But, a lot of the companies we are invested in are raising new rounds of capital at higher valuations. We have a good batting average and my personal batting average is pretty good too.

We picked the name “Hyde Park”, not because of the University of Chicago. Turns out there are lots of Hyde Parks around the world and we didn’t know how big this thing could get. We didn’t want to limit ourselves.

I truly love and appreciate every entrepreneur that took the time to pitch us. It’s pretty flattering when you think about it. For the ones that we invested in, win or lose I am glad we did. Thanks for giving us the opportunity to be a part of your business. You can’t invest in ‘em all, and you can’t win ‘em all in this business, but we try to.

We always had a bit of a bigger vision than investing in companies and making money. We had some other goals. We wanted to create an ecosystem. We wanted to educate people about startups. We wanted to interact with University of Chicago students and learn from them. We wanted to create a movement.

When we started in 2007, there was no such thing as a startup ecosystem in Chicago. Prior to HPA, it was incredibly tough to raise a seed round of capital here. Don’t take my word for it, ask any Midwest entrepreneur that came to Chicago in hopes of raising capital from 1990–2007. It was almost impossible. My friend Brad Feld likes to say it takes 20 years to build a startup community. In Chicago, we are on year 8.

The impossible is possible now. Chicago is the #7 startup community in the entire world. $1.6 billion was invested in Chicago startups last year. HPA was the spark that started that. Chicago is a great community for you to build your business no matter where you are from, gender or race, or what you want to build. HPA and plenty of other organizations will roll out the welcome mat for you.

HPA has 110 members and counting. The companies we have invested in have created over 500+ jobs. Our membership has invested over $15 million dollars. HPA has had over 50 students work as associates for us. We have even had associates work for us that came from that purple school up north, Northwestern.

Our membership is diverse. We have lots of women, women leaders, and every single race. We didn’t plan that. It just happened. Turns out, if you are accepting of everyone and do things right, everyone wants to be a part of it. HPA has been really lucky that way.

Since we started, the leading major at Chicago Booth has changed from Finance to Entrepreneurship. Northwestern and the University of Illinois are seeing increased participation in startups. University of Chicago undergraduates are highly interested in startups. Chicago Mayor Rahm Emanuel has gone out of his way to make the city hospitable to startups. Becoming a startup hub has been integral to the vision he has for the city. Tech people are moving to Chicago, not away from Chicago, to work on startups that are changing the world. Heck, the Cubs might make the playoffs this year! (But HPA can’t take credit for that.)

I have lectured at major Midwest universities, to financial groups, alumni groups and club groups. I have helped other Midwest angel groups get started. There is no way I saw that happening back in 2007. Back then, I’d be lucky to get 10 students to come. Now when I speak, I get 250. There is a vibrancy and vitality happening at Midwest universities from Minnesota to Illinois, and from Ohio to Nebraska. This generation is capable. They are cool. They are fun to be around.

If you aren’t from Chicago and are interested in startups, you might be curious about what’s going on here. The answer is, “A Lot!” You can successfully build a startup, or invest in one here. Hop on a plane. Jump on the L and take it to the Merchandise Mart. The Hyde Park Angels offices are there. Stick your head in and say hello. Someone will connect you with someone that can help you.

I want to thank each and every member of HPA. Thanks for being a part of it. You are creating something bigger than yourselves and changing the face of the Midwest. I want to thank the people in the Chicago startup community that went out of their way to lend a hand, or support HPA. You can’t imagine all the nooks and crannies I investigated to find members and deal flow in the beginning. HPA couldn’t have gotten to where it is without you.

I am stepping down from the board because it’s time for other people to step up. My style of leadership is not to be a control freak. I like to let everyone play a part. General Patton said, “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.” I could have lead a lot of deals, served on boards and other things. But I didn’t.

HPA will hopefully be around long after I am dead. I will still be around Chicago. In the winter I might try and get away. I meet and email with entrepreneurs every day. I am nowhere near done yet. One of the reasons I got my MBA at Chicago Booth was I saw the writing on the wall when it came to my first career. If there’s a chance for me to be a part of a firm, I’d look at it. The deal flow in Chicago has gotten pretty darn good.

See you in the trenches.