In 2002, the state of Illinois invested nearly $50 million into startups within the state of Illinois. The Illinois Venture Capital Association has since announced that it will invest $220 million of the state treasury money with venture funds across the state. The technology development account claims to have created over 3,500 jobs spurring from its $44.8 million investment across 14 venture and private-equity funds.

The state’s venture capital investment scene is still in very early stages, with several funds under $100 million. However, several firms including Hyde Park Venture Partners, Illinois Ventures, and Origin Ventures expect to launch follow-up funds. It is expected that the growth in venture capital spend will improve the overall startup economy within the state and provide opportunities for companies engaged in business with them.

According to Pro Business Plans, a company that actively monitors the venture capital industry, this will spur an estimated 14,000 jobs and create returns between 20 – 30% for the state. Illinois is not the only state that has venture capital funds, top states for the venture capital industry by investment include California, New York, and Texas.

The venture capital industry is expected to continue growing at steady rates as funds continue to outperform the volatile stock market. States that invest directly into these funds see it as a way to spur small business growth and create a more attractive environment for young entrepreneurs that are moving to large areas with venture capital financing. Because many funds co-invest, the introduction of investment capital sources into a single area has the ability to benefit the economy under a domino effect.

Venture Capital