By Steve Hendershot
(Crain's) -- The $5.7 million FireStarter Fund, a new Chicago-based venture capital fund that's backed by more than 40 Chicago tech entrepreneurs and investors, had its first capital call last week and is beginning the process of selecting the companies in which it will make its first investments.
Founder Matt Moog, who also founded Viewpoints Network and Built in Chicago, had the idea for the fund last summer and began recruiting a roster of co-investors that features many of the most prominent figures in Chicago tech, including Excelerate Labs' Sam Yagan and Troy Henikoff, Timelines' Brian Hand, New World Ventures' J.B. Pritzker and Morningstar's Joe Monsueto. Each of the more than 40 investors contributed either $100,000 or $200,000 to the fund.
FireStarter isn't limited to investing in Chicago companies, but its leaders say their focus will be on Chicago and the surrounding region.
FireStarter is unique among venture funds in a couple key ways. First, its members are allowed to co-invest in portfolio companies as individual investors. Second, it's structured so that all 42 members don't have to vote on every deal. A minimum of only six yes votes could approve a small investment; members who paid $200,000 into the fund get two votes, while members who invested $100,000 have one vote.
Mr. Hand, the FireStarter co-founder who developed the fund structure, tells Crain's more about how it works.
Read the complete Q&A on Crain's blog for Chicago entrepreneurs.
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Steve Hendershot writes "Silicon City," Crain's weekly column on tech news and newsmakers. Follow Steve on Twitter: @stevehendershot.
Follow Crain's small-business editor Ann Dwyer on Twitter, too: @AnnDwyer_Crains.
