With face-to-face meetings between investors and startup founders sidelined due to the coronavirus, a Chicago VC firm is launching a new virtual matchmaking initiative to connect entrepreneurs with tech investors.
Sandalphon Capital, led by Jonathan Ellis, has launched the “midwest.tech/connect” virtual summit, a virtual event that aims to connect startups across the Midwest to venture capital firms and angel investors.
The three-day event takes place September 8-10 and will create one-on-one meetings between founders and investors. The event is free for founders, and startups and investors have until Aug. 7 to apply to participate. As of Monday, more than 100 investors have signed up to participate, Ellis said.
“The Midwest always needs more early stage capital, and Covid-19 has made the challenge much more acute,” Ellis said. “Fundraising is taking longer and is harder than before—it’s become more challenging for both founders to raise and investors to source deal flow. We thought we’d do something about it.”
Following the application deadline, investors will get a list of the participating startups and will choose the startups they want to meet with. Founders are then given the list of interested investors, and they can opt-out of matches they don’t see as a fit. Ellis and his team will then schedule Zoom meetings between startups and investors, allowing for up to twelve 30-minute meetings during each day of the virtual summit.
The Covid-19 pandemic has slowed venture funding in Chicago and across the Midwest this year. Chicago companies raised $364 million last quarter, which is down nearly 22% from the previous quarter and down 41% from the same quarter last year, according to Pitchbook. Deal volume was also lower last quarter, with 54 Chicago companies raising funding in Q2 compared to 70 in Q1 and 69 in the second quarter of 2019.
Venture capital dollars also dropped across the entire Great Lakes region, which PitchBook defines as Minnesota, Wisconsin, Michigan, Illinois, Indiana and Ohio. Great Lakes startups accounted for 2.5% of national deal value the last quarter, compared to 3.5% the same time last year.
Ellis believes this new matchmaking event can help startups get in front of the right investors and develop a relationship that can potentially lead to more deals in the region.
“Having spent the last four years attending events across the Midwest I’ve seen again and again the power of getting a critical mass of investors and founders together in one place for one-on-one meetings,“ Ellis said. “At Sandalphon, we try and point founders to the best investors for them all the time, so this is our way of getting out of the way and letting everyone connect with each other without us holding up the process.”