Investing in Chicago Technology Companies

Investing in Chicago Technology Companies

With the burst of the technology bubble over a decade behind us, venture capital and private equity firms have been slow to fund start-up technology companies. Last year the median income raised in Chicago by these firms was only $3.4 million. This ranks  Chicago as 8th behind San Diego and about on par with Austin, Texas.  In comparison to the $7 million raised in Silicon Valley last year, Chicago has a ways to go to establish itself as a center for technology start-ups.

Yet, there are deals being done here in Chicago. We all know about the success of Groupon, but what about the other companies? Chicago firms have never been short of ideas for start-ups, but many never reach the level of financing needed to succeed.

In the venture capital business, one hot deal often begets others. Venture capitalists tend to focus on geographical areas near successful venture capital deals and IPO’s. The reason is when one company goes public, the technical staff and managers who made money on the stock offering end up wealthy. They have the cash to start new ventures and often reinvest in other companies in the area.

Clearstream is a Chicago-based company that is poised for success. Founded last November by Brian Mandelbaum this software company offers the first video evaluation product for advertising agencies and marketers. Their technology unlocks TV-like transparency for billions of streaming videos.

Prior to Clearstream, CEO/Founder, Brian was the VP of Platform Development at AdoTube, where he was dedicated to enhancing online video for advertisers. He has over 10 years experience in digital media, serving as Vice President and Director of Digital Innovations at Cramer-Krasselt/Chicago where he provided leadership in media strategy, innovation creative activation, performance media and social media.

He says, “There is a black hole in video advertising.” Brian contends that much money is being spent of using video to advertise, yet it is not being channeled to the consumer who would use the product or service. Clearstream helps advertiser and marketers better identify and market to target consumers who may have interest in their product, by offering relevancy for the potential buyer.

Clearstream has angel investors and a few venture capital firms backing this dynamic start-up. Located in the River North neighborhood, it currently has eight employees with expectations to be profitable by the end of this year. That’s quite impressive for a new company.

Brian Mandelbaum will be speaking on Friday, June 22 at Techweek. He is one of many speakers to discuss their strategy and vision for technology. Dynamic and a terrific speaker, Brian was also on the 4th season of The Apprentice. I would bet that he succeeds in his mission to change the way that advertising agencies and marketers target video for their audience.

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