Moments that made us

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Our members & alumni inspire us every single day! 

When we think about creating real, lasting change, you don’t have to look any further than these incredible innovators & leaders. Our community does the hands-on work to create jobs, bring new solutions & products to life, & build a brighter future. 

The collective impact of these innovators have made is clear:

  • $3.5B+ raised in venture capital
  • ~14,500 jobs created
  • 17 unicorns in membership
  • ~400 early stage companies, ~200 growth stage companies, & 200+ corporate partners
  • 850+ alumni startups still scaling

Our members & alumni are the engine that powers change in our communities and the heart & soul of everything we do at 1871. We’re so proud to cheer on every development, innovation, & win, because their success is everyone’s gain. 

Here are some of the major milestones that have made our 1871 community what it is today:

First unicorn born out of 1871: Cameo 

We’re honored that so many unicorns—startup companies with a value of over $1B—have called our community home over the years. Still, there’s nothing sweeter than celebrating the first unicorn to be born out of 1871.

Steven Galanis joined our community in 2016 as an early stage founder, where he went on to build & grow Cameo into the powerhouse it is today. As Galanis notes:

“Building a business from 0 to 1 is super hard and lonely. 1871 made all the difference for me and my team in the early days. Cameo wouldn’t be where it is today without the spontaneous connections I made with fellow entrepreneurs, mentors, and VCs at 1871.”

First woman founder: Erica Bethe Levin

1871 is home to a wide number of women-owned & led businesses, with the number continually growing. Our first woman founder joined our community in 2012. Erica is a rock-star, serial entrepreneur, who has since gone on to build & grow a number of successful startups including CheekyChicago & Globowl. 

When asked about her time at 1871, she said: 

“Being the first female founder at 1871 has been one of the greatest honors of my professional life. 1871 led me to a myriad of investors, advisors, mentors and friends. Some of my most instrumental relationships come from my time at 1871. Additionally, we were able to garner substantial press for the business given our relationship with 1871—we were covered by Crain’s, the Chicago Tribune, the Sun-Times and CNN.” 

First virtual international member: Ernesto Escalona & Alexandra Ramak

1871 is where paths intersect from anywhere in the world, as our members today access our community virtually, in-person, &  in our virtual reality campus 1871 VX. Our first international members Ernesto Escalona & Alexandra Ramak joined in 2019, who participated in our roadmap programming (PYROS) & built their business BoughtThis while living in Caracas. 

“We are from Venezuela, living in Caracas, and as entrepreneurs we felt lost for a lot of the time and had a rough time trying to find any help in our journey…” they said. “We’ve always believed that success is mainly on you, but being in PYROS makes us feel sure that there are definitely no excuses. We are so grateful and blessed for being here.”

It’s our mission to help all of our innovators make real change in their communities, no matter where they are in the world!

First 1871 CEO: Kevin Willer

1871 first opened its door on May 2, 2012 with the mission of inspiring, equipping, & supporting innovators that are building extraordinary businesses. Leading our organization through our earliest days was Kevin Willer, who served as our founding CEO. 

Kevin aspired to build a community where members can get the resources, mentorship, & peer-to-peer support they need to build companies that will create jobs in Chicagoland. When asked about his goals for 1871 when the organization was just six months old, he said: 

“We want to be a showcase for what’s going on in the startup community in Chicago. When people come here from around the country & the world, we want to show them that this is a great place to build companies.” 

First CityLights award winner at the Momentum Awards: Livongo

In 2020, we acquired the Illinois Technology Association (ITA), which welcomed their community of growth stage companies & expanded our network of support to businesses that are looking to scale for long-term success. 

At the Momentum Awards that year, we had the opportunity to honor Livongo with the first CityLIGHTS Award for growth stage companies given under the 1871 name. Livongo, a company that empowers all people to live their healthiest lives by transforming the healthcare experience, was recognized among an incredible group of finalists—highlighting just how much stronger our community is with our growth stage members. 

During his acceptance speech, then CEO Glen Tullman explained just how important having a community of peers & supporters is in creating change:

“I’m particularly proud of the Chicago tech community that has produced so many great companies that are driving new jobs that pay well, that are driving innovations that are solving a problem, and that are really making a difference.” 

First LTNtech cohort

“As a LatinX entrepreneur, it has been challenging to find business-minded organizations that understand the complexities and challenges of being a LatinX startup and with whom we could engage at so many levels, feel at home, and welcome!” said Cohort 9 alum and Aegis Founder Reginald Maisonneuve. “When that organization is also active and effective in advocating and advancing the businesses under its wings, it is truly rewarding.  That is 1871 & IHCC.  They are making an important difference for us in the short time we’ve been with them.”

LTNtech (formerly LatinX) in partnership with the Illinois Hispanic Chamber of Commerce is our longest-running affinity program, with our first cohort of 12 Latino-led startups launching in November 2016. Six years & eight cohorts (and counting) later, our LTNtech alumni have gone on to build successful businesses with the resources & connections they made as a member.

First BLKtech cohort: 

BLKtech is our newest affinity program designed to empower Black founders. Launched in 2021, our first cohort featured 26 startups that quickly created a tight-knit community of support. 

When asked about the impact BLKtech had on her journey, Cohort 1 alum & Heart of Culture, Inc founder Keesha Vinson said:

“The beauty of a community is its common unity and to be surrounded with like-minded individuals with similar backgrounds and challenges makes the journey of entrepreneurship bearable. There was something so refreshing about seeing so many individuals who look just like you and are just as ambitious, if not more, on similar paths to solve real problems with amazing businesses. I’d recommend BLKtech to anyone looking for an amazing tribe in their entrepreneurial pursuit.”

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This list is just a handful of our community’s numerous firsts, and there are so many more successes & wins that 1871 members have accomplished over the years. 

From our entire 1871 family, thank you to all of our members, mentors, & supporters. The impact our community of innovators have had in tech, Chicagoland, & the world inspires us every day to do what we do.

Here’s to many more years of innovations & milestones!

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What’s the secret to 1871’s success? 

It’s not any one, single thing. The magic of our community can’t be boiled down to its base components or solved like an equation. What makes us who we are is all the things that don’t often get put into words—the energy that forms from the density & diversity of the people who share your passions, the surprises & serendipity from every fortunate collision, & the smallest, most unexpected interactions that create the greatest impact. 

We know that great things happen when changemakers connect & collaborate! 

Our community is made up of thousands of members, mentors, corporate sponsors, university & community partners, VCs, & policymakers that come together from both in-person & virtually from around the world to make a difference in our lives & others. 

Here our some of our community members explaining the moments & people that made all the difference to them on their journey:

What is something significant, serendipitous, or surprising that happened during your time at 1871?

Kevin Willer, former CEO of 1871: 

A couple of weeks after we first opened the doors of 1871 in May 2012 we were honored to be visited by the British Prime Minister, David Cameron, early on a Sunday morning when he was in town for the NATO Summit. We had to make it seem like a regular busy weekday at 1871 so we needed our members to all be there on a Sunday morning, but could not tell them who the VIP guest was so we bribed them with coffee and donuts. The PM was awesome walking the space talking with many of our entrepreneurs—and then meeting in the current TechStars space with the CEO’s of many Illinois-based large corporations like Kraft, Caterpillar, and Groupon. 

Reva Minkoff, Digital4Startups Inc: 

I do not typically “fan girl,” but I will never forget when I saw Madeline Albright down the 2.0 hallway, took a photo at a huge distance because I didn’t want to be intrusive, and then went to one of the 1 person conference rooms to call my grandma and gush about how omg I just saw Madeline Albright.

Howard Tullman, former CEO of 1871: 

President Bill Clinton visit to 1871 and posing with the team.

Lakshmi Shenoy, Embarc Collective & former 1871 team member:

Aside from making so many close friendships with startups and 1871 team members during my tenure, I met my husband while working there! I’ll forever be grateful to 1871 for this.

Erica Bethe Levin, Globowl:

We earned a lot of press given our status at 1871. We were featured at the opening party and many other events/seminars/etc. I was selected as part of an exclusive group of “Women Who Launch” where we met with Mayor Emanuel to share our feedback on the Chicago start-up ecosystem. Our biggest success, however, was the group of people we met at 1871—many of whom are invaluable to my business (and my life) today.

Tony Wilkins, Standing Oak Venture Partners:

I will always cherish the first few days as Investor in Residence at Excelerate Labs (now TechStars) when people—yes, even Troy Henikoff—were rolling around the space on Razor Skateboards to get around.

John Martin, BUNDLAR:

An 1871 mentor, Andy Friedman met with my co-founder, Matt Wren. Andy advised me Matt was looking for a CEO and co-founder and that we should all meet later that day at the 4 pm TGIF in the auditorium. We met over a cold beer and the rest is history. 

Bruce Leech, DePaul University:

The funniest thing before Covid is the amount of times I was asked where the men’s washroom was! Since our DePaul room was at the end of university row, I guess I looked like I would know the answer when I was in our office late at night!

Tonny Thomas, NakiNoku: 

I was invited into a Mastermind group formed out of 1871 PYROS Launch members. It’s become almost like a family and an accountability group. I have to say sometimes I work a little harder to try and keep my micro-commitments. Being invited was a moment of serendipity, and I think the honesty of the group genuinely changed the trajectory of my startup!

Who was someone who made a significant impact on your 1871 journey? 

Jeffrey Osuji, Eventnoire:

Betsy has proven to be a compassionate and visionary leader who puts founders first and advocates for her members. 1871 is one of the true gems of our city and I’m extremely proud to be a member. 

Erica Bethe Levin, Globowl: 

I’d like to thank Tony Wilkins—with whom I spent countless hours in 1871’s conference rooms—compiling projections, spreadsheets and pitch decks. Tony is the kind of friend, mentor and advocate that every entrepreneur dreams of having in their corner. I’d also like to thank Steve Collens who championed for 1871 from the very beginning and encouraged me to apply as a member. It was truly the most life changing of experiences and is the reason I remain an active part of the start-up community in Chicago today.

Fiona McEntee, McEntee Law Group:

I’ve been a mentor at 1871 for many years and during this time, I’ve met the most incredible people including founders, 1871 team and partners, and my fellow mentors.

Julie Novack, PartySlate:

1871, you have created such an amazing hub for tech innovation in the city of Chicago! 1871 will always be part of PartySlate’s founding story!

Matthew Wren, BUNDLAR: 

I want to thank Kevin Willer for getting it all started, with a big shout out to the Excelerate Labs / Chicago TechStars team who was there from the beginning. Thank you to Howard Tullman who grew 1871 into an iconic Chicago powerhouse. A gigantic thank you to Betsy Ziegler, who has led 1871 through arguably the toughest economic environment the world has known in recent history. Finally, thank you to all the board and staff members who have made 1871 work—with a special thanks to Rhonda who’s constant enthusiasm at the front desk sets the tone for the entire place when you walk in the door.

Reva Minkoff, Digital4Startups Inc:

A big thanks to the whole 1871 team as well as to all of my former table-mates I’ve had the pleasure to sit with over the years – I’ve been here for a very long time, and it wouldn’t be the same without you all. 

Mark Lawrence, SpotHero: 

1871 is a gift that keeps on giving in my daily weekly interactions of mentors, investors and friends. Those relationships that started a decade ago in 1871 meetings and events continue to be some of the most important in my network. I’m looking forward to seeing where we go in the decades to come!

Lakshmi Shenoy, Embarc Collective & former 1871 team member:

Having been able to build a startup hub model of my own in Florida, I want to thank the founding team of 1871, led by Kevin Willer – you took a big vision and magically brought it to fruition . And I owe so much to Howard Tullman, who served not only as my boss but also as a tremendous personal mentor.

John Martin, BUNDLAR:

Every time I would enter 1871 I was greeted by a warm and robust welcome from Rhonda. Rhonda’s positive energy was contagious. Happy birthday 1871 and a big hug to Rhonda!

Tonny Thomas, NakiNoku: 

Special thanks to Veronica Blum who first inducted me into this community. Her enthusiasm is infectious, and she is a incredible cheerleader to those of us who are going through the dark valley of entrepreneurship!

Bruce Leech, DePaul University:

Thanks to the entire 1871 staff for always being so accommodating to our students and our DePaul community. Rhonda and Bobby are the best and we missed being there these past two years and glad we are getting back to normal.

Tony Wilkins, Standing Oak Venture Partners:

Eternal thanks to Sam Yagan for inviting me to help out with Excelerate Labs weeks before they became one of the first tenants at 1871, a big step on a life changing journey.

What has being a part of the 1871 community meant to you?

Garry Cooper, Rheaply: 

Thank you, 1871! You provided a platform for Rheaply to grow. You’ve provided a community that reflects the beauty of our city.

Mark Lawrence, SpotHero: 

When I first entered the doors of 1871 a decade ago, I remember being in immediate awe at the vastness of the space. It felt empowering to bring my ideas and two-year-old startup, SpotHero, to such a large and inviting space. At that time, there was nothing like 1871. The Chicago startup community desperately needed a place where we could gather, connect and innovate. 1871 quickly became more than just that place—it established itself as a home for our community.

Matthew Wren, BUNDLAR: 

In 2016, following an 1871 immersive technology summit I was invited to present at, the seed for BUNDLAR was planted. BUNDLAR now employs 26 people full time (20 in Chicago), and we are creating a new market for augmented reality as a service, with customers including Microsoft and the US Air Force.

Derek van der Vorst, Sound Intelligence:

I’m proud and excited that we were the first company to be selected for the Orange on the Lake Program, a cooperation between 1871, World Business Chicago and the Dutch Consulate of Chicago.

Fiona McEntee, McEntee Law Group:

1871 has consistently focused on diversity, inclusion, and representation. I specifically remember years ago, its intentional effort to – while it was very close anyway – have gender parity among mentors. I’m honored to be part of such a special and inspirational community.

Jeffrey Osuji, Eventnoire:

In 2019 when I quit my job to work full time on Eventnoire  I was terrified. Immediately joining 1871 was one of the best decisions I’ve made. 1871 was a godsend as the resources and connections they supplied enabled me to move faster, raise my friends and family round quicker, and think more strategically about my business.

Joe Holberg, Spring: 

1871 has been vital to Spring’s founding, growth, and scaling over the years! It’s been amazing to be a member company at various stages for 6 out of 1871’s 10 years and we’re looking forward to the next 10 and 100 years of 1871’s success in Chicago and beyond!

Julie Novack, PartySlate:

I loved being part of the 1871 community. I started there with a single desk and remained there through 3 rounds of funding and 2 incubators — Techstars and WiSTEM. We hosted our first event planner educational session in 1871’s event space back in 2018.

John Martin, BUNDLAR:

I love 1871. BUNDLAR got started because of 1871!

Bruce Leech, DePaul University:

Showcasing our student and alumni startups within the 1871 community has provided tremendous exposure for their business. Many of our students have also participated and won Campus1871 which is an excellent program for our students to collaborate with students from the other universities.

Tony Wilkins, Standing Oak Venture Partners:

Ten years at 1871 has delivered many lifelong friends, lots of laughs, colleagues, mentees and the founders of SpotHero, Cameo, TraknProtect and NutriSense who I met during my office hours sessions….and invested with, proving that you can do well by doing good in a community sponsored ecosystem. Have loved the past 10 years at 1871 and look forward to another 10 years of the same!

Mert Hilmi Iseri, MATH Venture Partners

10 years ago, 1871 was launched to make founders’ dreams real. Lots have changed in the past decade, hundreds of new companies, thousands of new faces, millions in new funding. However, what stayed the same is the energy that makes us all stand up for each other as part of this community. The energy that makes us all founders, the audacity to pursue a seemingly impossible vision. No matter what happens in the decade ahead, one thing is for sure – 1871 is going to be the place where we show up for each other, shoulder to shoulder, to change the world.

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We’re so excited to launch our first ever NFT collection for our 10 Year anniversary! 

The collection titled “Decade of Innovation” was created to commemorate everything 1871 has accomplished in our first decade, from our beginnings  here in Chicago to becoming the #1 business incubator in the world. Our Fortunate Collisions blog article showcases the positive influence of 1871 on our community through the lens of our amazing members and team both past and present. 

Want to support the continued mission of 1871? All of the proceeds from this 10 year NFT collection will go to continuing our work! 

Consistent with the name and reason for releasing this NFT collection there will only be 10 NFT’s available for purchase in this collection. But that doesn’t mean there won’t be a variety of options for you to choose between including five 1871 plates and five rotating 10’s to commemorate the first 10 years of 1871.  

Our NFTs are named for the influence we have had and hope to continue in the next decade.

View 1871 on Opensea.

3D motion graphics

Plates

Check out the Decade of Innovation collection on OpenSea and follow 1871’s OpenSea account to see future collections!

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As the pandemic lingers and virtual happy hours dry up, the hybrid workplace has shown it’s here to stay. In this new environment, technology companies have had to adjust their popular perks and policies to meet employees where they are. Whether their workforce is at home or in the office, many employers are wondering: what will employee perk programs look like in a hybrid world?

To find out, we’re inviting technology companies to participate in a nationwide survey, TECHniques: Perks & Policies in a Hybrid World. Understanding how your employee perks and policies compare to other technology employers can reveal strategies for how to attract new talent and continue to engage the seasoned team you already have.

Assurance and MMA are inviting 1871 members to complete the survey and receive a complimentary copy of the results.

The survey will remain open until April 22, 2022. Click here to get started.

Please contact Joe Spallina at joe.spallina@marshmma.com with any questions.

Fill out the survey!

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Author: Tracy Harrison, Managing Director, Deloitte & Touche LLP

For more than 25 years, Deloitte has been honoring the most innovative, fastest-growing public and private technology companies across North America through The Technology Fast 500. In recent years, the list has been dominated by the coasts and Chicago’s mighty tech community consistently remains underrepresented.

Let’s change this together.

I have seen first-hand the high-growth companies that are driving technology and innovation forward in our city. Now it’s time for you and your teams to receive recognition for all that you have achieved. 

  • What is the Deloitte Fast 500? Each year, Deloitte names the 500 fastest-growing technology, media, telecommunications, life sciences, fintech, and energy tech companies in North America; recognizing the passion and dedication it takes to be a leader in these ever-changing industries.  
  • Why apply for Fast 500? Being recognized as a winner can increase visibility, brand recognition, and growth opportunities. It can instill pride in your teams and attract the attention of talent, investors, and the business community.
  • What does it take to land on the list? In 2021, winners demonstrated growth rates between 87,037% and 212%.  To apply, businesses must meet the following criteria:
    • Minimum of four years in business with headquarters in North America
    • A growth rate of 75% or greater (FY18-FY21) including base-year operating revenues of at least US$50,000 (FY18) and current-year operating revenues of at least US$5 million (FY21)
    • Proprietary intellectual property or technology sold to customers in products or services that contribute to a majority of the company’s operating revenues
  • Who made the list last year? We proudly recognized 6 winners—including some repeat winners—from Chicago last year. 2021 Chicago Winners included: Shipfusion Inc. (147), LogicGate (152), XSELL Technologies (179), Simplify Healthcare (239), OppFi (335) and Built In (415).
  • Where can we apply? For more about the Deloitte Technology Fast 500 awards, including application criteria and deadlines, visit www.Fast500.com. Applications are open through June 24.

Let’s Get Started
Being a part of the Fast 500 helps our community grow, attracts talent and investment, and challenges us to work harder, think smarter, and dream bigger.

I’m eager to see what great Chicago companies will make us proud this year!

Start your application at Fast500.com | Reach out to our local team with questions

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms. Copyright © 2022 Deloitte Development LLC. All rights reserved.

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After a tough deliberation over an incredible group of 20 semi-finalists, we’re thrilled to announce the 5 founders who will be moving on to our finalist event! 

We hope you’ll join us in-person or virtually on 3.31 to help us cheer on our finalists as they pitch their businesses to a panel of VC investors. Our first place winner will receive a minimum of $10K & all finalists will have the chance to receive equity funding from a total of $80K!

Top 5 Companies of the WMNtech Pitch Competition 2022

About the pitch competition

The WMNtech Pitch Competition is our latest addition to our larger women tech founder initiative, which includes immersive programming, tailored resources, mentorship, and community support to help early stage women-identifying entrepreneurs embrace their unique strengths & break down the barriers they face. We can’t wait to bring together our full community of early, growth, and corporate members, VC partners, and allies as we bring much needed attention & resources to some incredible women-led startups!

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94 startup founders applied to enter our WMNtech Pitch Competition, but only 20 are slated to move on to the semi-final round! After an intense first round review process from appointed leadership at 1871, we’re very excited to announce the startup founders and their companies moving on through.

Top 20 Companies of the WMNtech Pitch Competition 2022

About the pitch competition

The WMNtech Pitch Competition is our latest addition to our larger women tech founder initiative, which includes immersive programming, tailored resources, mentorship, and community support to help early stage women-identifying entrepreneurs embrace their unique strengths & break down the barriers they face. We can’t wait to bring together our full community of early, growth, and corporate members, VC partners, and allies as we bring much needed attention & resources to some incredible women-led startups!

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Applications Open for Third Annual WMNfintech, Women’s Fintech Program from BMO Financial Group and 1871

  • tWomen-led startups can apply through April 22nd, 2022
  • Target startups have a U.S. based product or service that supports the financial sector

CHICAGO, March 22, 2022 – BMO Financial Group and 1871 today are issuing a national call for applications for their leading fintech industry program for women-led startups, WMNfintech. Applications for the 2022 program will be accepted through April 22nd, 2022.

Developed by BMO to help bridge the gender gap in the startup community, WMNfintech was launched in 2020 and continues to provide women entrepreneurs resources, support and mentorship to accelerate their business’ growth while diversifying their professional networks through BMO and 1871’s community of expert advisors, technology partners and founders. This is the latest evolution of the BMO / 1871 Innovation Program and was co-created specifically for women-founded and women-led startups developing products or services for the U.S. financial sector.

“We’re proud to work side-by-side with our longtime partner BMO to continue to expand this storied program,” said Betsy Ziegler, CEO of 1871. “WMNfintech is an essential part of our commitment to creating a culture of belonging for women in technology. The long line of success stories that have come out of this program highlight how transformative it is when women founders are given the resources, support, and community of advocates they need to thrive.”

“The WMNfintech program has experienced continued success and our network of alumni and supporters across the venture community are eagerly awaiting this year’s cohort,” said Andrew Harrison, Head, US Digital Partnerships, BMO Financial Group. “We’ve seen first-hand how this program can help drive meaningful growth for founders while offering an incredible opportunity to diversify their network with our partners and clients. This is a powerful opportunity to support innovation and the diverse customer-centric technologies that can transform the banking experience.”

     The program will provide selected startups with:

  • A three-month program with guidance from industry experts at BMO, including an executive champion who will offer leadership guidance
  • Four-months complimentary membership to 1871, including access to their space, resources, and roadmap of support    
  • Curriculum focused on enterprise sales cycles, vendor management, information security and risk and regulatory requirements
  • The opportunity to pitch investors for feedback, mentoring, continued connections and/or funding

Participants will also have access to 1871’s structured yet flexible roadmap of support known as PYROS, which includes a 12-week series of workshops, shareouts, deep dives, and one-to-one mentoring built to help founders navigate startup fundamentals and propel them forward through every business milestone, from idea stage through product-market fit.

WMNfintech is an essential part of WMNtech, 1871’s overarching affinity offerings for women founders and leaders in technology. Ranging from tailored and regular programming, mentorship, pitch competitions, and more, WMNtech serves women professionals from across the entire maturity curve and empowers them to succeed in every step of their career journey.

The program includes a pitch day designed for startups to gather feedback from and network with BMO senior executives. Participants may also have a potential future opportunity to pilot their product with BMO.

WMNfintech strongly aligns with BMO’s commitment to women through its Zero Barriers to Inclusion Strategy. Learn more about BMO’s support for women entrepreneurs and purpose to Boldly Grow the Good in business and life.

WMNfintech applications are due by April 22nd, 2022. More information and the application can be found at: https://1871.com/membership/wmnfintech

About BMO Harris Bank

BMO Harris Bank provides a broad range of personal banking products and solutions through more than 500 branches and fee-free access to over 40,000 ATMs across the United States. BMO Harris Bank’s commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the United States. For more information about BMO Harris Bank, visit the company fact sheet. Accounts are subject to approval. BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a highly diversified financial services provider with total assets of CDN$1.02 trillion as of January 31, 2022.

About 1871

1871 is Chicago’s technology hub and the #1 ranked private business incubator in the world. It exists to inspire, equip, and support early stage, growth scalers and innovators in building extraordinary businesses. 1871 is home to ~450 technology startups, ~300 growth stage companies, and ~1,500 members, and is supported by an entire ecosystem focused on accelerating their growth and creating jobs in the Chicagoland area. The member experience includes virtual and in person access to workshops, events, mentorship, and more. The nonprofit organization has 350 mentors available to its members, alongside access to more than 100 partner corporations, universities, education programs, accelerators, venture funds and others. Since its inception in 2012, more than 650 alumni companies are currently still active, have created over 11,000 jobs, and have raised more than $1.65 billion in follow-on capital.

###

Contacts:

Jeff Roman, BMO, Jeff.Roman@bmo.com, (416) 867-3996

J Blaszczykiewicz, 1871, j@1871.com

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Is your company’s offering obviously awesome? If not, it might be time to revisit your product positioning.

Toronto-based April Dunford wrote about this topic in her book “Obviously Awesome,” which ParkerGale’s Paul Stansik rated the best business book a couple years back. April now works exclusively with growth-stage companies on their positioning.

“It’s really hard to do good marketing and sales without having tight positioning,” April said. Learn more about the difference between positioning and messaging, how to “fix” positioning problems, and why founders, PE firms and portfolio companies should even care about positioning in the first place.

Don’t miss this latest #PrivateEquityFuncast interview between April and ParkerGale Partner Cici Zheng.


Listen on:

Apple Podcasts

Google Podcasts

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Apps are now open for our 2022 summer internship program! 

If you’re looking to gain experience & build your resume while making valuable connections in the Chicago tech & startup scene, our internships are for you! Apply today for your chance to learn & grow among the brightest leaders in our expansive community of early stage founders, growth stage businesses, & Fortune 50 companies. 

Check out our openings & apply today:

Marketing copywriting intern 

The marketing copywriting intern will assist the Creative Producer and Copywriter brainstorm, write, and edit a wide range of 1871 content, including for social media, event promotion, and blog features. 

Marketing web optimization intern

The marketing web optimization intern will assist in brainstorming & editing a wide range of 1871 web content, including for landing pages, blog features, & more.

Marketing design intern

The marketing design intern will work on a number of design projects, including UX, illustration, motion, and data visualizations for 1871 content that will support awareness and interest phases of the marketing funnel.

Marketing operations intern

The marketing operations intern will work on a number of operational projects, including organization of project folders, templates, internal resources guide, and media assets that will optimize the internal and external functions of the marketing team.

Video & social content intern

The video & social content intern will assist the video producer in creating short-form videos to be distributed across 1871’s social media platforms.

Development intern

The development intern will assist the Director of Development with a wide range of responsibilities in support of 1871’s development strategy, including donor tracking & conducting research on potential sponsors & strategic partners. 

Events intern

The events intern will work alongside the Senior Manager of Events and will focus on hands-on/tactical events planning and execution. 

Product database management intern 

The product database management intern will support the Director of Affinity Programs in identifying efficiencies and creating streamlined processes in delivering specialty programs to the community.

Product data & analytics intern

The product data & analytics intern will support the Senior Manager of the PYROS Program in identifying efficiencies and creating streamlined processes in delivering the PYROS program to the entrepreneurial community.

Human resources & talent programs intern

The human resources & talent programs intern will support the Director of Talent Programs in identifying efficiencies and creating streamlined processes in delivering programs to the community.

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On March 8, 2022, we joined our partner think!, a Glanbia company, and hundreds of leaders, founders, & allies for our annual International Women’s Day celebration! This year’s hybrid event brought together our full community both in-person at 1871 and from around the world for a day filled with educational programming, an incredible keynote, & plenty of opportunities to connect. 

In her opening address, our CEO Betsy Ziegler gave attendees the challenge to learn one new thing, meet one new person, & take the pledge to #BreakTheBias. Together, we took important steps toward building a more equal future for both ourselves & others.  

Betsy also shared the exciting news that we are introducing WMNtech, our newly-renamed affinity offerings for women professionals in technology! Our bi-annual WMNtech Founders & WMNtech Leaders programs will continue to provide important resources, support, & an engaged community to give women innovators an even greater opportunity to thrive. Read our full announcement here!  

A huge thank you to our partner think!, a Glanbia company, our keynote speaker Mary Dillon, and our incredible speakers, including Margaret Izard Oskoui, Krissie McMenamin, Tiffany Yvonne, Nicole Wood, & Foram Sheth. Thank you as well to everyone who joined us for this unforgettable day, as we came together to #BreakTheBias! 

We hope to see you for IWD 2023 next March! 

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CONTACT

J Blaszczykiewicz

Director of Marketing, 1871

j@1871.com

1871 introduces WMNtech affinity offerings for women-identifying professionals in technology, including WMNtech Founders & WMNtech Leaders.


1871 announced today that its long-running programming for women-identifying founders & leaders—WISTEM and the Women Leadership Accelerator—are getting new names. 

As part of the rebrand, WISTEM will become WMNtech Founders and the Women Leadership Accelerator will become WMNtech Leaders. 

The announcement is 1871’s latest step in its ongoing commitment to providing tailored resources and support that help women-identifying professionals embrace their unique strengths and break down the barriers they face. The WMNtech offerings will serve members across 1871’s entire maturity curve, and are specifically designed to focus on the individual’s personal, professional, and leadership development. 

The WMNtech affinity offerings include: 

  • WMNtech Founders, designed for women-identifying tech founders that are building and growing their businesses
  • WMNtech Leaders, designed for women-identifying leaders working within larger tech companies

In addition to the rebrand, affinity offerings will now live under one product suite overseen by 1871’s Director of Affinity Groups. WMNtech Founders and WMNtech Leaders will also serve as the framework for the organization’s other affinity groups BLKtech and LTNtech (fka LatinX), which will launch founder and leader offerings in the coming year. 

“Whether you are an entrepreneur who is building your business or a young professional who wants to invest in your leadership skills, we want you to feel connected, included, and have the opportunity to thrive,” said 1871 CEO Betsy Ziegler. “Today’s announcement is an important milestone in our ongoing commitment to creating a culture of belonging—connecting innovators with the resources, support, and an engaged community. I look forward to welcoming future cohorts of WMNtech Founders and WMNtech Leaders, the next generation of women-identifying entrepreneurs and leaders across Chicagoland and beyond.”

Cohort members of both WMNtech Founders and WMNtech Leaders will gain access to:

  • Personal development programming and coaching 
  • A community of peer-to-peer support 
  • Deep resources and a wide network of allies

WMNtech programming runs bi-annually, with new cohorts welcomed in the fall and spring. Visit our WMNtech Founders & WMNtech Leaders pages to apply to join a future cohort! 

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Venzee Technologies is producing all-new episodes for their podcast Rethinking Supply Chain, recorded in 1871’s podcast studio!

Check out the latest podcast release, where Venzee CEO and podcast host John Abrams meets with Erik Severinghaus – EVP of Strategy and Business Development at Conexiom – to discuss their thoughts on how long it will take for our supply chain issues to be fixed.

Full episode available on the Rethinking Supply Chain website!

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In the newest episode of The 10 Minute Talent Rant James Hornick (Partner) and Jeff Smith (Partner) discuss why companies should make Chief Hiring Officer a thing.

As they said, the 3 must-have things to run a business:

1. Product

2. Sales

3. Hiring

Without all 3, you’re sunk.

Everyone prioritizes the first two but hiring…that just kinda happens by itself right? Post it and they will come?

Talent Acquisition has evolved. Successful recruiting draws on a variety of skills – sales, marketing, HR, operations, etc. It doesn’t cleanly ‘fit’ inside of any other part of the org.

Here’s a crazy idea: maybe it should be its own thing.

Listen to the episode here.

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Get your pitches ready, because applications  just opened for our first-ever WMNtech Pitch Competition!

On average, less than 3% of all VC investment goes to women-led companies, and at 1871, we’re committed to playing an active role in closing this funding & opportunity gap. In this three-round virtual pitch competition, early stage women-identifying tech founders pitch their company for a chance to win a cash prize & equity opportunities from a panel of VC partners. 

The WMNtech Pitch Competition is our latest addition to our larger women tech founder initiative, which includes immersive programming, tailored resources, mentorship, and community support to help early stage women-identifying entrepreneurs embrace their unique strengths & break down the barriers they face. We can’t wait to bring together our full community of early, growth, and corporate members, VC partners, and allies as we bring much needed attention & resources to some incredible women-led startups!

Event Breakdown

Round 1 —Application review:

2.9.22 – 3.02.22 | Apply here! 

Round 2 — Semi-finals:

3.24.22 | Time TBD

The top 20 founders will virtually pitch their businesses to a panel of business leaders in a closed session. 

Round 3 — Finals

3.31.22 | 4:00 PM – 7:00 PM CST

The top 5 finalists will participate in a hybrid pitch to a panel of judges consisting of business leaders & major VCs in our network. This round will be open to the public.

Funding & awards 

Participating founders will have the chance to earn:

Visit our website for more information & apply by 3.02.22 for our WMNtech Pitch Competition!

  • Cash prizes & equity funding from our sponsoring VC partners, totalling $50k+ that will be awarded at the final event
  • 6-months free membership to 1871 to our top 5 finalists
  • Valuable connections to the best & brightest business leaders, tech entrepreneurs, & investors!

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2021 came and went in the blink of an eye. Coming off of an extremely challenging year, no one knew what to expect 12 months ago.  We saw signs of the job market thawing in Q42020. The Unemployment Rate hit 6.7% in Dec 2020 (down from 14.7% in April 2020). But a recovery was far from certain.

Twelve months later?  Labor shortages are plaguing every industry.  The unemployment rate hit 3.9% in December 2021.  But that is only part of the story. The labor participation rate (percentage of Adult Americans in the workforce is near an all-time low of 61.9%. Broad numbers about the market as a whole aren’t terribly useful.  Understanding how they affect you or your company is more important.

Hirewell started releasing our Quarterly Data Insights series to discuss the trends we are seeing in hiring. We’ve got 90+ recruiters across the US.  They are spread across six functional practices – Tech, Human Resources & Recruiting, Finance & Accounting, Marketing, and Real Estate/Construction. In 2021, we helped over 350 companies hire over 1500 people.  So we see firsthand what is happening when it comes to hiring. We crunched the numbers to see what happened in 2021.  And what might be in store for 2022.

2021 Hiring Trends

The year-over-year increase in hiring volume was massive. Our hiring volume increased 2.5x.  Hiring increased 30% every quarter (compared to the previous quarter) until Q4, when we saw the standard slow down around the holidays. When looking at year over year numbers, Q4 was up 310% from the prior year.

What was hot?  Software engineers.  But that is no surprise.  The insatiable demand for engineers barely slowed down in 2020.  In 2021 we helped companies hire over 200 software engineers.  But that is only part of the story.  We saw the average salary increase every quarter.

  • Q1 113k 
  • Q2 119k
  • Q3 127k
  • Q4 134k

That’s an increase in average compensation of 18% in one year.

What else was hot?  Recruiters.  Hirewell launched its HR & Recruiters practice 10 years ago.  In that time, we have placed several hundred recruiters at companies across the US.  We placed 90 at clients in 2021. That was after placing 1 between April and October 2020.  When the market swings that wildly, it catches a lot of people by surprise.  It also causes salaries to spike quickly. 

  • Q1 Average Recruiter Salary = $85k
  • Q3/Q4 Average Recruiter Salary = $114k

That’s an increase of 34% in roughly 9 months. What a time to be alive for recruiters.

2021 Hirewell Internal Highlights

2021 was a busy year for us at Hirewell.  

  • We grew by over 40 people and are just under 100 employees.
  • We expanded nationally.  Pre-pandemic, >90% of our employees were in Chicago.  Now >33% of our people are in other markets.  
  • Our turnover was 6% (roughly a quarter of our industry’s average). The vast majority of that turnover was our employees going to work for our clients.

The biggest story for us in 2021?  We took on outside investment from Prytek and bought a software company. We think services + technology will be what drives our continued growth.

2022 – What’s next?

It is a fool’s exercise to predict what is going to happen in the course of a year.  That doesn’t mean we don’t have some educated guesses though.

  • Hiring in January picked up right where 2021 left off.  We saw an 18% year over year increase in job openings.  January starts are double what they were in 2021
  • There are roughly 11,000,000 open jobs in the US. There will continue to be a shortage of qualified candidates..
  • Recruiters are going to continue to be in high demand. As are software engineers.  
  • Wages are going to continue to rise, but for how long? 20+% increases are not sustainable for most companies.
  • Companies need to start thinking outside the box.  Upskilling existing workers and hiring people without prior experience needs to be a priority for all companies.
  • Recruiting technology needs to evolve. There is a shortage of recruiters. And they spend way too much time sourcing candidates.  We are working to address this challenge.

What’s next for Hirewell

We are continuing to hire – we’ve brought on 8 new hires in January. Our OnDemand Recruiting practice is on pace to grow 100% from 2021. Our investment in technology is already paying dividends for our recruiters at Hirewell.  We are excited to roll it (Sourcwell) out to clients later in Q1.  If you are interested in becoming a beta client – let us know!

Originally published here.

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Some say the pandemic is the public health crisis of our generation. But if you ask blood banks, they might disagree.

Just hours before I sat down to write this, the American Red Cross declared its first ever national blood crisis. The U.S. is currently experiencing the worst blood shortage in a decade, with dangerously low inventory levels attributed to multiple factors. Ongoing blood and plasma shortages in Europe, Africa and other regions also have regulatory bodies working with non-government organizations and the healthcare community to consider new directives and practices that can reduce or prevent an equal crisis.

Preserving every blood donation has become a global priority.

As such, many blood banks are turning to technology-monitoring tools to ensure units being distributed to hospitals and ambulatory surgery centers remain consistently below the prescribed temperature limit (usually 6°C or 10°C) and can be administered to the patient. Interestingly, though, some organizations are going a step further and leveraging these irreversible temperature indicators for reverse logistics. They are required to confirm unused units returned to the blood bank have not exceeded temperature thresholds – as defined by AABB Standards and 21 CFR 640 – and allowing them to make an informed redistribution decision.

EXPERTS SAY THE “30-MINUTE RULE” CAN’T ALWAYS BE TRUSTED

All blood banks have a responsibility to ensure donated blood and blood products are safe before they are used. Extensive lab testing is conducted to identify certain proteins or infectious disease pathogens are not present when donated blood is accepted into the blood bank system.  Once it is processed and made available for use, the primary hazard for the blood is heat exposure during storage or transportation that can negatively impact patient outcomes during blood transfusions. Despite this risk, many organizations still rely on the “30-minute rule” to monitor cold chain performance and confirm blood product viability.

However, many clinicians, researchers and others in the healthcare community have questioned the reliability of this “test” method in recent years.

As one published paper notes, “The quality of [red blood cells] RBCs depends on the storage conditions. The 30-minute rule could be shortened or lengthened if the acceptable temperature threshold is breached or maintained. The unknown factor is that one cannot confirm that the cold chain (system used to prevent biologic entities from deterioration by exposure to unacceptable temperatures) was maintained.”

In turn, we have received many calls from laboratories and blood banks that want to put the 30-minute rule to the test in their own facilities and supply chains using Zebra’s Safe-T-Vue® 10, manufactured by Temptime. Safe-T-Vue is an irreversible temperature indicator that provides an easy-to-read visual cue if a blood product has reached or exceeded the indication temperature to support compliance with blood handling requirements.

What customers have since confirmed is that the rule may work for smaller blood banks supporting just a few transfusions, but it generally cannot be trusted as “truth” in more fast-paced hospitals where blood is issued to the operating room (OR), emergency department or individual floors. With the units typically transported in coolers, blood banks, hospital workers and others involved in the logistics process cannot be confident the returned blood units have been kept at the appropriate temperature. As such, blood banks can’t re-inventory those units for re-issue, so they must dispose of them.

This is the fundamental problem with the “30-minute rule.” It does not provide the verification that the blood has been kept below the required temperature during the entire time it has been outside the blood bank. This leads to unnecessary waste of blood because those units may have remained in the proper temperature range the whole time and could have been restocked for future use.  Though waste is never ideal, these are live-saving blood products we’re talking about.

WE’RE FAR BEYOND PROOF OF CONCEPT

As I mentioned, blood banks, labs, hospitals and others in the blood products supply chain contact us when they are seeking a trusted technology to assure that every unit is being properly handled from a temperature perspective. They have heard about the blood temperature indicators and want to see if they meet the performance requirements and can provide the level of confidence needed in the maintenance of the cold chain – adding a new level of trust in both their shipping and return receipt processes, as well as blood product prep ahead of transfusions.

Rightfully so, many organizations want to test the Safe-T-Vue technology for themselves in their real-world environment versus relying solely on references. I remember one customer in particular that conducted a performance qualification and comparison study of two different types of blood temperature indicators with the goal of evaluating which would best meet its needs. It supported multiple blood banks of varying sizes and wanted to ensure it was using a product that would be right for all.

The customer ultimately chose Zebra’s Safe-T-Vue® 10 because it was simpler to interpret temperature excursions and was more accurate. That’s because with the Safe-T-Vue, as the blood bag begins to warm up, the indicator goes from white to red speckled to fully red. It’s very clear and easy to read.

Once the organization settled on the Safe-T-Vue indicator, though, it decided to take its research a step further with a comprehensive qualification study to verify it would work across several scenarios. To do that, its team simulated real blood bags by using a mixture of water and 10% glycerin. The team tested different volumes of bags and put the Safe-T-Vue on different areas of the bag. It used NISD probes to monitor internal temperatures and to compare how the indicator reacted.

Not surprisingly (at least to us), the customer’s findings showed that regardless of where Safe-T-Vue indicators were placed or volume of the blood bags, the results were the same. In all instances, the color of the indicator began to turn speckled at around 9º or 9.5ºC and were fully red at 10ºC. The team also conducted subsequent qualification studies with similar findings. Four years later, it tested Safe-T-Vue indicators on thawed frozen plasma and then, four years after that, on low titer whole blood.

MINIMIZED RISK OF WASTING VALUABLE BLOOD SUPPLIES, INCLUDING PLASMA

The primary reason for using blood temperature indicators, of course, is to prevent heat exposure blood products from being used, reduce blood product waste, and preserve blood products. It’s estimated that RBCs cost about $350 per bag, not including the labor involved for bringing it into inventory, which also adds to the overall expense. With Safe-T-Vue, there’s no question as to whether the blood product has stayed below 10ºC – eliminating the risk of disposing of units that are still viable because of any temperature control uncertainty.

This particular organization found that using the Safe-T-Vue for five-day plasma also saves critical time. It takes about 30 minutes to thaw plasma, which is done in a water bath as bags are agitated. Once thawed, the plasma is put in the refrigerator to cool, then a Safe-T-Vue is applied to the bag so it’s ready to dispense. That means plasma is always on hand, and there is no need to take the time to thaw it and then cool it to the appropriate temperature at the time it’s needed.

This is important considering that nearly 5,000 units of platelets and 6,500 units of plasma are needed daily in the U.S. alone, according to the latest American Red Cross estimations.

THE RISK OF FOLLOWING “THE 30-MINUTE RULE”

When it comes to blood products, extreme care must be given to make informed decisions. Even if we weren’t facing a blood or plasma crisis, we wouldn’t want to lose even a single unit due to subjective decision-making. Yet, this is a likely scenario if we leave it up to “time” to tell us whether a blood product is inside or outside an acceptable temperature range. That is why U.S. regulation does not include “time” as an appropriate single characteristic to determine whether a unit could be restored back into inventory and continual “temperature” measurement has become the standard.  

In other words, no one should be making a life-changing call based on the 30-minute rule.

Originally published here.

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Does the company you founded have a written mission statement and the steps required to achieve it?  If you are running a successful startup, the answer is most likely yes.

Now be honest, do you have a similarly written plan for your personal finances?   Have you taken a close look at where you are today, what you are spending now, and how your financial plan will determine your future lifestyle?

The truth is that most entrepreneurs simply do not have time to manage their personal finances.  You are probably confident that a life-changing sum may be coming your way upon exit.  But with all the work needed to reach this goal – long hours, personal investments, overseeing your team – it is hard to find any time to manage and prepare for your financial success.

Founders like you face a unique set of challenges. It is no surprise that many find themselves at the cusp of realizing their dream of a liquidity event only to realize that, “wait… I have not prepared for this at all!”

The good news is that you are not the first entrepreneur to come to the realization that planning your personal finances will lead to the lifestyle you want.  Others have already experienced these challenges before you, leaving a framework of solutions we can apply to your specific needs.

Four Major Challenges: Time, Team, Tax, And Trust(S)

By applying the solutions covered in this guide you can: have more time, pay less tax, rely on a team of specialists, and trust that your legacy will be secured.

Here are four challenges faced by entrepreneurs and impactful solutions.

CHALLENGE #1: TIME

One of the modern facts of life is that nobody has any time.  In theory, new technology should help us save time.  But better technology means higher expectations, and higher expectations create more work.  This is even more true for a busy entrepreneur like yourself who is constantly at work building your company.

You can gain back control of time via one of the oldest technologies: your money.  Imagine you could invest in a way that allowed you to wake up every morning and say: “I can do whatever I want today.” Personal financial planning gives you options.  Retire early, build another company, live without financial stress; any of these goals can be achieved once you get started.

SOLUTION: YOUR FINANCIAL PLANNING RELATIONSHIP

The financial planning process begins by clarifying your goals with a financial planner.   A good planner will learn about your values and aspirations.  They will guide your progress and help bridge the gap between where you are financially and where you would like to be.  You will no longer have the burden of second-guessing every financial decision; or the risk of not making any decisions at all.

For many entrepreneurs, the financial planning process begins by addressing three core needs:

  1. Liquidity – your cash flow needs to maintain or improve your current lifestyle
  2. Longevity – your ability to grow and protect assets from a successful exit with strategic tax and investment planning
  3. Legacy – your wish to improve the lives of others, such as family, friends or charity

Along the way, good financial planning will also help entrepreneurs manage equity compensation, stock diversification, risk tolerance, investing behavior, education planning, and even team building.

Financial planning will help you spend less time worrying about your money and more time on what’s important to you and your family.  The playbook works, as it has for many others.  The next step is to identify the right person to quarterback your team and execute.

READ MORE:  What Does A Financial Advisor Really Do For You

CHALLENGE #2: TEAM

Most entrepreneurs are hyper-confident.  You know how to build a business.  Conviction in yourself and your abilities enables you to execute your vision.  But while you may be skilled at constructing a company balance sheet, managing a personal balance sheet is daunting.

You probably could manage your own finances if you had the time, desire, and training.  But the fact is, most successful entrepreneurs and professionals simply do not.  It is also important to understand that investing is not all about skill. It is about emotion.  And it is extremely hard for “anyone” to maintain objectivity and not make emotional decisions about their own money.

Just like you have done in your company, you will want to get the right team in place to meet these challenges.

SOLUTION: A FINANCIAL QUARTERBACK FOR YOUR TEAM

Think about building your personal financial team in the same way as you would with your company.  You hire outstanding managers to own different parts of the business and increase its valuation.  The only difference is we are working together to grow assets for you and your family.

Key members on a personal financial team include an accountant, attorney, private banker, and insurance specialist.  In many arrangements, these advisors work individually, placing an added burden on you to organize and delegate.  That is why we recommend finding someone who can act as the quarterback to manage your team.  This is the role of your Wealth Advisor, ideally a CERTIFIED FINANCIAL PLANNER™, who is also the individual that knows you and your goals best.

Your trusted advisor will sort through your financial needs and collaborate with your team, bringing all the specialists onto the same page and adding tremendous value.

READ MORE: How An Advisor Acts as A Quarterback to Your Team

CHALLENGE #3: TAXES

Imagine paying millions of dollars in tax upon a successful liquidation event from your company stock… only to learn that you did not have to. There is a saying that failing to plan is planning to fail.  In no subject is that wisdom more appropriate to entrepreneurs than in taxes.

Entrepreneurs face multiple tax challenges in each stage of their financial journey.  Early on, taxable income may be lower but future stock compensation must be strategically planned for.  Following a liquidity event, larger pools of assets must be managed properly to minimize taxable gains and income.  All along the way, solid deduction strategies can help lower a founder’s tax bill.

SOLUTION: A QUALIFIED SMALL BUSINESS STOCK (QSBS) CASE STUDY

One tax planning strategy for entrepreneurs delivers the greatest impact of all: Qualified Small Business Stock planning.  The QSBS exemption was created to reward risk-taking entrepreneurs and investors who create jobs with significant tax benefits.

The impact of these benefits is tremendous: QSBS exemption rules allow a company’s founders, employees, and early investors to exclude up to 100% of their capital gain on a sale of company stock, up to $10 million or 10x their initial investment.

While the tax-saving benefits of properly understanding QSBS can be measured in millions, QSBS can be difficult to plan for early on.  As a company nears or begins contemplating an exit, making a QSBS analysis to plot out the right moves to reap the QSBS benefits makes obvious sense.

To help you navigate the maze of QSBS rules, we have created a flow chart for download: “Does Your Stock Sale Meet the Qualified Small Business Sock (QSBS) Exemption?”  Follow the arrows to see if you qualify.

READ MORE: Entrepreneurs Guide to Qualified Small Business Stock 

Click here for PDF

CHALLENGE #4 TRUST(S) AND ESTATE PLANNING

Many entrepreneurs are young and perhaps have yet to even consider basic estate planning. There is no need until wealth is achieved post-liquidity, the thinking commonly goes.  This thinking is incorrect.  In fact, it is before paper wealth turns into real wealth when estate planning techniques can be the most powerful to preserve your family’s legacy.

An entrepreneur still building their company faces basic estate planning needs.  Having a will and term insurance can mitigate financial disaster for a family in the unfortunate event of death before a company’s valuation has truly been executed.  Estate planning is more than worst-case scenario planning, however.  The real solutions to preserving a family’s legacy relate to planning for positive events.

SOLUTION: A GRANTOR RETAINED ANNUITY TRUST (GRAT) CASE STUDY

How you plan your estate will have a significant impact on how much your family must pay in taxes, especially if you own assets like company stock that you expect to appreciate substantially.

Currently, estates above $11.58 million held by an individual ($23.26 million for a married couple) are subject to federal estate tax.  These limits will expire in 2026 down to approximately half of current levels.  At a hefty Federal tax rate of 40%, and many states adding additional state tax, a substantial portion of a wealthy family’s assets are likely to go toward taxes rather than to their heirs

Strategic estate planning can allow entrepreneurs minimize estate tax and preserve family history.  One example of this strategy is the creation of a Grantor Retained Annuity Trust, or GRAT.

A GRAT can freeze the taxable value of a business in its early stage, allowing you to limit future taxes.  You can retain control and continue to receive cash flows upon exit.

Assets with a low current valuation compared to their expected future value (such as stock in a privately held firm) are particularly well suited to putting into a GRAT.  This is because assets with the potential for great appreciation also have the potential for triggering large estate tax liabilities, and a GRAT allows you to bypass these future taxes.

READ MORE: Guide to GRATs – Estate Planning for Business Owners

Source: Kitces.com

IN CONCLUSION: YOUR OPPORTUNITY IS ALSO A RESPONSIBILITY

An entrepreneur does not have the security of the benefits that come along with being employed by a large company.  What you do have is enormous financial upside.  This opportunity comes with a responsibility to plan for future wealth.  We commonly see entrepreneurs who are very successful in their professional lives yet are disappointed that their skills have not transferred to their personal finances.

The four main challenges of time, team, taxes and trust(s) are a natural hurdle for laser-focused entrepreneurs busy building their company.  The good news is that there is a financial planning process that can help solve each of these challenges.  Ultimately, we hope that financial planning will help you spend less time worrying about your money and more time on what’s important to you and your family.

ABOUT SEAN

Sean Condon, CFP is a wealth advisor with more than a decade of industry experience. He specializes in helping entrepreneurs build their person wealth and serving as the quarterback to a team of advisors. Taking an owner’s approach, Sean does his best to understand the many elements of his clients’ entrepreneurial journeys. He works in a technically competent and caring manner to reduce his clients’ anxiety about money issues and serves as a fiduciary by always putting his clients’ best interests first. Learn more about Sean by connecting with him on LinkedIn.

We are available to answer your questions, and we would enjoy the opportunity to see if we are a good fit for helping you reach your financial goals.  You can reach us by calling (844) 377-4963 or emailing windgate@windgatewealth.com. You can also book an appointment online here.

Originally published here.

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