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Groupon’s impact on Chicago’s startups

By
Dan Primack
Dan Primack
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By
Dan Primack
Dan Primack
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January 14, 2013, 7:11 PM ET
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FORTUNE — Last week Erin Griffith wrote that a 2013 IPO for flash sales site Gilt Groupe would be huge for the New York City tech scene. Venture capitalist Greg Gretsch followed up by tweeting that the IPO itself must be long-term successful for it to matter in NYC, since Groupon’s IPO (GRPN) “has done zilch for the Chicago tech scene.”

First, let’s all acknowledge that a 2013 Gilt IPO is only slightly more likely than a Denver Broncos Super Bowl win next month. But, beyond that, my gut was that Greg’s dismissal of Groupon’s impact was wrong. So I reached out for a couple different sets of numbers.

To support his point, Thomson Reuters reports a 28.36% drop in the amount of venture capital disbursed to Chicago-area startups between the first nine months of 2011 and the first nine months of 2012 (and a 28.36% fall in the number of companies):

Source: Thomson Reuters

On the other hand, Groupon’s ability to create liquidity for founders and early investors helped lead to the creation of seed-stage investor Lightbank, which says that it has backed more than 50 companies out of its $200 million fund (around 1/3 of which are in Chicago).

Thirteen of the total portfolio already has secured Series B funding, including Chicago companies Belly and Sprout Social. No Groupon, (probably) no Lightbank.

I’m not arguing that Belly, Sprout Social or any other Lightbank-backed Chicago company will become a billion dollar behemoth, but they’ve got a better shot at it than if Groupon had not existed. Not to mention the thousands of people working at Lightbank-backed companies that might get a future entrepreneurial itch.

So let’s leave this as a “remains to be determined” for now…

Sign up for Dan’s daily email newsletter on deals and deal-makers: GetTermSheet.com

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By Dan Primack
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