In March, Janet Tavakoli, President of Tavakoli Structured Finance, authored a great post picked up by BuiltInChicago.org titled 9 Reasons Silicon Valley Should Move to Chicago. She touches upon several high level features The Windy City offers that could help attract more startups to Chicago.
Building upon its affordability (compared to Silicon Valley), social culture, and tax perks, I’d like to drill down one more level and offer 3 additional reasons why fintech startups should consider putting roots down in Chicago, specifically in Chicago’s Financial District located in the downtown Loop area:
1. “Handshake Proximity”
Financial technology startups are wise with the resource of TIME.
The Chicago Loop’s Financial District neighborhood is a vertical hive of efficiency and architectural grandeur laid out over a relatively compact number of city blocks. From LaSalle Street’s Federal Reserve Bank and Chicago Board of Trade buildings to Wacker Drive, a vital artery lined with financial heavy hitters such as CME Group, the genius of the Financial District is not just the availability of office space and airport proximity as Ms. Tavakoli points out, but the proximity in which fintech business activities can take place within walking distance.
A fintech startup entrepreneur can easily conduct a myriad of business tasks while saving commuting time and money (not to mention reducing their carbon footprint). Within blocks they can meet a client for coffee, take investors to lunch, procure a loan, and network with potential brokers, exchanges, data partners, and consultants. They even have the seasonal opportunity to grab some fresh produce from the Daley Plaza Farmer's Market and still make it to their outbound Metra or El train in a matter of minutes.
2. Financial Markets History Was - And Still Is - Made Here
Fintech startups build the future by leveraging existing knowledge shaped by the past.
The CME announced in February 2015 the closing of most of its open outcry futures pits in Chicago. While these closures will mark the end of an era for the futures industry, which built itself around the pits, it also presents opportunity for innovation. In a response to the historic Chicago closings, Tradovate CEO Rick Tomsic wrote in a blog post responding to the closings: “I’m happy to say that we’ve been finely attuned to the evolution taking place all along. In 2001 my team and I foresaw this... Sometimes we’re early with ideas.”
While Chicago is an epicenter of the evolution taking place in derivatives, many industry experts, traders, and fintech staff who were brought up in the open outcry markets in the city are ready to pivot into roles around the electronification of the markets. Fintech startups in Chicago’s Loop can throw a stone and hit several subject matter experts ready to bolster new innovations with their keen insight and technical knowledge of the markets. In addition to New York and London, Chicago is home to a rich network of financial organizations, clearing firms, data centers, brokers, and other entities vital to the operations of fintech startups.
3. Even Chicago’s Financial Resources Are Booming
Fintech startups must surround themselves with answers AND advocates.
Chicago was recently named a model for financial education, according to Secretary of Education Arne Duncan. Education in finance at all levels helps shape overall better markets. Chicago has always had an established focus on finance, so it's a natural environment in which to cultivate a business.
An added bonus for fintech startups is that Chicago’s financial education programs also produce a bright pool of local candidates seeking internships. The rise of competitive student programs like the University of Chicago’s annual Midwest Trading Competition have garnered support from area trading and technology firms, exposing the next generation of innovators to the world of fintech.
Chicago is seeing a visible increase in educational events for professionals in the financial industry. FinTech Exchange 2015 is a new event taking place in Chicago on April 23rd, addressing finance and technology, from systems to consumer behavior, to big data, to regulation and everything in between. For a fintech startup, there is virtually always an opportunity to attend an event where the exchange of ideas over finance and technology occurs, not to mention the networking opportunities with key industry participants.
Numerous engagement opportunities exist for fintech startups: from participating in the FIA Futures & Options Expo held annually in downtown Chicago, to tours and mock trading sessions at the local exchanges, to leveraging news and media resources such as the John Lothian News - Chicago is a fintech startup’s resource dream. There is also a local chapter of Women in Listed Derivatives (WILD) in Chicago advocating the careers of women in the industry.
The company I work for, a financial technology startup called Tradovate, has made its headquarters in Chicago’s financial district. If Tradovate were an actual plant putting down roots, it is for certain that we've selected a nutrient-dense location in which to thrive. The conditions for a fintech startup are prime and we encourage fellow fintech startups to consider all that The City That Works has to offer.
Consider Chicago as a home for your fintech startup -- and let’s innovate together!
--
Sarah McNabb is Director of Marketing at Tradovate, a financial technology startup developing a new online futures trading experience. Sign up for a pre-launch invite at www.tradovate.com.
.jpg)
.png)
