Venture

Starting Line, Chicago’s Newest B2C VC Firm, Closes $17M For Its First Fund

Chicago, lakeside city of grids, has a new venture capital firm on the block.

Starting Line may technically be a little over a year old, but on Thursday the firm formally announced that it closed $17 million in capital commitments for its inaugural fund.

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Founded and led by Ezra Galston—a former professional poker player and founder turned venture capitalist who previously rose up the ranks from intern to principal at Chicago Ventures—the firm aims to identify and invest in seed and early-stage B2C startups “building products and services for the 99% economy,” according to its announcement.

The firm’s operating manual says, “We invest where we see opportunities to make products and services available to a broad range of Americans – not build incremental services for the affluent.”

Starting Line has already made several investments. The firm participated in the Series A round of breakout influencer media marketplace Cameo’s seed and Series A rounds. Starting Line also led the $5 million seed round of Austin-based direct-to-consumer pot, pan, and kitchen supply startup Made In Cookware. The firm’s other portfolio companies include extended product warranty provider Clyde, inter-city ride-share matching platform Hitch, credit-building debit card company Zoro Card, and cryptocurrency-backed consumer loan shop Unchained Capital.

“We really want to inspire the next generation of entrepreneurs,” said Starting Line principal Haley Kwait Zollo during a sit-down interview with Crunchbase News. “I feel like there’s amazing talent here [in Chicago] but they’re settling for these Series B companies in safe situations,” she said. The firm wants to encourage a little more risk-taking. Zollo, a veteran of two Chicago consumer clothing services, TrunkClub and Mac & Mia, said that from her newfound perspective, from the other side of the venture negotiating table, raising money should not be as intimidating as it is.

Venture capital is something of a cloak and dagger industry where, traditionally, secrecy reigned. However, Starting Line is positioning itself as a firm focused on transparency. The VC firm maintains its “Starting Line Operating Manual” in a Github repo, detailing its investment criteria, check-writing strategy, and its quarterly LP letters, among other facets of the firm. In this respect, Starting Line took inspiration from Bloomberg Beta, which also maintains an open “manual” on GitHub; Roy Bahat, head of Bloomberg Beta, is among the firm’s advisors.

“I don’t think we’re that far ahead of anyone else in the more mature markets, in terms of transparency. If you look at a lot of the emerging managers, they’re focused on transparency, relatability. Nobody wants a VC who’s a jerk anymore. These are kind of table stakes now. In Chicago, though, [transparency and relatability] is a massive competitive edge. It’s kind of sad [that that’s the case] but it’s an opportunity to execute against,” said Galston.

Galston, and by extension the firm, sees the Chicago market as one in transition.

“The focus needs to be less on self-adulation and more on value creation,” said Galston, remarking on the city’s startup scene. “I think there are too many distractions in Chicago, and I think that’s because we don’t have enough examples of real value creation to know what that looks like. So what I would do is create more winners who can educate the next generation that ‘winning’ isn’t hanging out having drinks every night.” Or going to a seemingly endless string of award shows putatively celebrating the best and brightest in the city’s tech scene.

Galston cited GrubHub founder and advisor to the firm, Matt Maloney, as a practitioner of the disciplined entrepreneurship he’d like to see more of in the city’s startup scene. “I’ve been to a lot of award shows since 2014, and I’ve never seen [Maloney] at them. He’s either got a business to run, or a family to spend time with. Right? Both of which are more important than, like, gluttony,” Galston said.

Starting Line also provides its portfolio companies a rather unique perk: mental health benefits. As stated in its mental health policy, the firm will cover founders’ initial evaluation of therapy, executive coaching, or co-founder counseling, up to $200. Founders who opt to engage in at least three months of mental healthcare will have their first three sessions covered by Starting Line.

Galston, Zollo, and venture partner Ade Olonoh seem to be in this for the long haul. The firm wants to continue building closer connections with investors on the coasts, and to help shape the Midwest venture landscape, and the region’s startup ethos, in the meantime.

Illustration: Li-Anne Dias

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