Home-grown capitalists find like minds-Building unites firms, investors

Even as venture capitalists flew around the country to close deal after deal in the late 1990s, they wanted their investments to move within driving distance.

By Rob Kaiser
Tribune staff reporter

Chicago-area entrepreneurs, for example, often got backing from Silicon Valley investors only after agreeing to go west.

Today, early-stage investors want their companies even closer to home.

Marie Platowski noted this trend after seeing a number of haggard Chicago-area venture capitalists and angel investors returning from day trips to Naperville and Peoria to check up on their companies.

"I kept hearing over and over, `I feel like I’m in the adult day-care business,’" said Platowski, a veteran of the executive office industry.

With this insight, Platowski hit upon an intriguing real estate concept for the Chicago area: By bringing entrepreneurs and investors together under one roof, she filled up a vacant Northfield office building as nearby commercial properties suffered.

In the building she now manages and partially owns, Business Network Center, Platowski recruited a small group of venture capitalists and angel investors, who in turn have brought in entrepreneurs they are backing. Lawyers, accountants and other service firms that can assist the growing businesses also rent space in the building.

The setup allows investors to keep close tabs on how their money is being spent and gives entrepreneurs a chance to work among a like-minded group that can offer counsel, contacts and commiseration.

"Here you have the benefit of a shared office with the feeling of your own office," said Steven Subar, managing partner of Z2M4 Inc., which works with venture capitalists and entrepreneurs.

The idea sounds suspiciously like Internet incubators, a concept that became trendy during the dot-com bubble.

Yet there is at least one key difference: Platowski’s building makes money even in these difficult times.

Internet incubators, such as Chicago-based Divine Interventures, now Divine Inc., imploded after the IPO market for unproven companies dried up. Rather than raking in rent money, the incubators took stakes in the start-ups, expecting to cash out when the businesses were sold or went public.

Today, most incubators are university-supported enterprises or serve as research and development wings of large corporations.

Building provides amenities

Platowski’s building borrows elements of incubators and executive office buildings, providing a receptionist, technical support, conference rooms and other amenities.

"It’s more of a country club atmosphere than an office atmosphere," Platowski said.

Like country clubs, the building does not let in just anybody. Platowski said she has turned away about 25 potential tenants since the building opened in December, mainly because they were "wannabes" or because they brought along baggage, such as lawsuits or messy divorces.

One businessman who makes promotional trinkets was turned away.

"I can just visualize him hawking his stuff from office to office," Platowski said.

Tenants describe the atmosphere as having the advantages of a corporate office, being surrounded by knowledgeable colleagues, without the downside of having to depend on others. Also, they said, chance encounters with an investor or another entrepreneur in the hallway often yield a new lead or contact.

"You can plan meetings all you want, but it’s often the unplanned meetings where you get the great ideas," said Michael Silverman, chief executive of Evanston-based DuoDesign.

Location, location, location

Besides the basic concept of creating a close community of investors and entrepreneurs, Platowski said the building’s North Shore location just off the Edens Expressway is key to attracting tenants.

Filling up the three-story building has been no small feat. The significant rise in corporate bankruptcies and layoffs the past couple years have pumped up vacancy rates in Chicago-area office buildings.

"It’s a very soft market out here," said Bruce Kaplan, president of Chicago-based Northern Realty Group Ltd.

Kaplan added that Platowski’s building "is a clever play because it gives you an opportunity to manufacture your own market."

http://www.chicagotribune.com/business/chi-0211180004nov18,0,1340328.story?coll=chi%2Dbusiness%2Dhed