Hey friends,

Welcome to the 11th edition of the Driver’s Seat 🚙 

I hope you all had a great Memorial Day Weekend!

📍 Today’s Topics

1. Why Chicago Part Two? 📍 

2. Chart of the Week 📊

3. Coastal vs Non-Coastal Investments 🇺🇸

4. Asks From Our Founders 🤝

5. Events Around the City 🗺

Let’s dive in! 🚙

📍 Why Chicago Part Two

Inc Magazine recently published an article highlighting the distinctive qualities that set Chicago apart from other ecosystems.

I wanted to highlight a few of their points below:

• Chicago is the top city for corporate relocation and expansion, attracting businesses for 10 consecutive years.

• We’ve been recognized as the "Best City in the U.S." and the second most beautiful city in the world.

• Chicago ranks No. 3 among U.S. metros in terms of GDP and is one of the top 25 global economies.

   

• Crime rates in Chicago are lower than perceived, with a lower violent crime rate than the national average.

• We have a diverse economy, with no dominant sector, providing ample opportunities for growth and collaboration.

• We have excellent transportation infrastructure, including two major airports, extensive public transit, and easy access to interstate highways.

• We offer an affordable cost of living, with median rents lower than many other high-growth cities.

• We’re a safe haven from natural disasters, ensuring business continuity and stability.

• The city attracts a highly educated workforce, with a large number of postgraduates and college graduates choosing to live and work in Chicago.

• Chicago has a significant number of young, high-income consumers, creating a thriving market for businesses.

So next time someone asks you “Why Chicago?” now you know 💡 

📊 Chart of the Week

AI is revolutionizing many industries, mine included.

I recently came across a report discussing the importance of leveraging data in venture capital.

According to Gartner, by 2025, more than 75% of VCs are expected to use AI and data analytics to guide their decisions.

This isn’t a new thing at Drive, as we’ve actively embraced AI and data analytics in our day-to-day.

According to data from the report, the use of AI in VC directly impact AUM.

Use cases for being a data-driven investor include deal screening, reducing funding disparities, promoting inclusiveness, and enabling fairer investment decisions.

Ultimately, the adoption of AI and data analytics propels the VC industry into a new era of informed decision-making and transformative growth.

🇺🇸 Coastal vs Non-Coastal Investments

Is investing in startups located between the coasts more lucrative than investing in startup hotspots like San Francisco, New York City, and Boston?

Connetic Ventures shed light on this question by sharing insightful data in a publication from last year.

Through research from sources like Crunchbase, Tracxn, and Pitchbook, they compared non-coastal startups (startups between the coasts) to their coastal counterparts to identify differences in funding, team size, and performance.

The findings indicate that non-coastal startups tend to raise less money and have fewer investors compared to coastal startups.

They also have smaller founding teams. However, the likelihood of success is similar between the two groups.

Notably, non-coastal startups provide better cash-on-cash return to investors, achieving higher exit valuations relative to the amount of capital raised.

Furthermore, the analysis revealed that startups between the coasts have a higher probability of reaching revenue thresholds, demonstrating comparable performance to coastal startups.

The acquisition to funding ratio, indicating the valuation multiple on revenue, is also higher for non-coastal startups.

Additionally, non-coastal startups outperform in generating home run returns, with a higher likelihood of exits exceeding $500M and providing substantial returns for investors.

In summary, investors can find promising opportunities in these regions, benefiting from better returns without the intense competition often found in coastal areas.

🤝 Asks From Our Founder

We currently have four companies in the Drive Chicago Seed Program:

1. Coherence Finance 👾

2. JupiterDX 🏥 

3. Rivet 🎤 

4. BRX 🧱 

Below are a few asks from our founders:

Coherence Finance

• Subscribe to the Coherence newsletter

JupiterDX

• Intros to seed stage digital health founders for mentorship.

• If you know someone who has or is struggling with Long Covid, please share this treatment and management survey with them.

Rivet:

• Intros to music labels or artists.

You can reply directly to this email if you have any recommendations or insights on the asks above ⬆️

🗺 Events Around the City

Global New Venture Challenge

• Hosted by University of Chicago

• Tuesday May 30

• RSVP

Digital Expressions - NFTAsia Exhibition Opening Reception

• Hosted by imnotArt

• Tuesday May 30

• RSVP

VentureCat 2023 Annual Student Startup Competition

• Hosted by Northwestern University

• Wednesday May 31

• RSVP

Chicago Sports Tech

• Thursday June 1

• RSVP

Coffee Chat in Humboldt Park

• Hosted by Abhinaya (m25) and Brad (Techstars)

• Thursday June 1

• RSVP

Reply directly to this email if you have a tech event you want featured in the Driver’s Seat!

👋 See you next time!

Thanks for making it this far! 😎

Follow me on Twitter and Instagram for even more Chicago startup news and photos of my favorite restaurants in the city.

Also please share the Driver’s Seat with others 🚙 

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