2019 ILGIF Annual Report

2019 ANNUAL REPORT TABLE OF CONTENTS A Message from the Treasurer ��3 Fund Overview ��5 Why Invest in Venture Capital?...... 5 Overview...... 6 History of ILGIF...... 6 ILGIF Goals...... 6 Vision ��6 Mission ��6 Illinois Venture Capital Landscape ��7 Investment Performance ��9 Investment Activity in 2019 �� 10 Key Investment Updates �� 10 Economic Impact ��12 Equity, Diversity, and Inclusion ��13 Statistics ��13 Select Fund Managers ��13 Select MWVD-Companies...... 14 Diversity Commitments Provisions...... 14 Investment Strategy ��15 Investment Policy ��15 Illinois Nexus ��15 Sustainability/ESG ��15 Portfolio ��17 Manager Lineup ��17 Portfolio Construction...... 17 Strategy Diversification...... 18 Vintage Year...... 18 Select Portfolio Companies...... 18 2019 ILGIF Summit ��19 Overview...... 19 Stakeholders ��20 Illinois State Treasurer ��20 50 South Capital ��20 ILGIF Advisory Council ��20 Strategic Partners ��20 Future Initiatives ��21 ILGIF Corporate Venture Summit...... 21 ILGIF Scout Initiative ��21 HBCU.VC Internship ��21 TechCrunch 2021 ��21 • • • • I ampleasedtohighlightthefollowingaccomplishmentsfor2019. innovation. the on capitalize and leverage strong educational institutions, and to a robust incubator and continues accelerator network entrepreneurs, continue new to startups, ILGIF Thriving induce State. the across exists inclusion. that ecosystem startup flourishing & diversity advancing in strides significant and impact economic robust performance, investment strong including 2016, in Fund Innovation and Growth Illinois the launching formally since occurred advancements Exceptional time. Mostimportantly,withoutsacrificeofinvestmentreturns. same the at all - Illinois in community entrepreneurial inclusive and diverse more a foster can we objectives are not investment mutually exclusive. These We can ecosystem. make diverse money, we and can facilitate inclusive economic impact, more and a fostering also while State our across serve as an economic catalyst that attracts, assists, and retains the quality also and tech-enabled returns investment businesses strong, deliver to aiming businesses, tech-enabled in investing firms capital venture Illinois with investments targeted makes ILGIF vehicle, investment impact an As full-timeemployeesfrom thetimeofinitialinvestment. areover6,300full-time employeesinIllinoiswhichrepresentsan increaseof2,732new economicimpact.Across 625companies,includingover157IL-based companies,there a56%increaseyearovertotalingapproximately 40%ofthetotalinvestedcapital. increased from $77.5 million in December 2018 to $121.5 million at the end of 2019. That’s ChampaignwithaninvestmentFirstLeaf Capital. leveragetheinnovationecosystemthatunderpins theUniversityofIllinoisatUrban- theChicagometroareainSavoy,Illinoisto broaden thegeographicrepresentationandto fundsandinvesting$44millionacross5ownedmanagedbyMWVDpersons. investmentstotaling$119.5millionintotalcommitmentswith2firsttime $304millionacross36fundmanagers.Throughout2019,ILGIFmadeatotalof12new Total assetsmanagedbyminority,women,veteran, anddisabled-owned(MWVD)funds Expanded Geographic Exposure - Exposure Expanded Geographic 2,700+ newfull-time IL employees– Investments inMWVD-OwnedFundsIncreased from$77.5millionto$121– $119.5 millioninnewcommitments– A MESSAGEFROM THE TREASURER Letter FromTreasurerMichaelW.Frerichs al invtv cmais ed Ti i wee h Ilni Growth entrepreneurial ecosystem. Illinois the our within many where for catalyst a as thrives is (“ILGIF”) Fund Innovation and This need. companies innovative early these of many for capital at-risk the provides equity growth and capital funding. andattracting venture available, be not may channels financing common more Where capital in accessing difficulties face cycle, life business the of stages all across companies, many know, we As Illinois. of we state great and the role in ecosystem capital the venture progress and and startup the in 2019 play the year calendar presents the during which activities investment Report, and Annual Growth Illinois Fund ever first Innovation our present to pleasure great with is It ILGIF invested in our first venture fund located outside ILGIFmadesignificant stridesaccelerating Asoftheend2019,ILGIFcommittedatotal 3 Illinois Growth and Innovation Fund Annual Report 2020 4 Illinois Growth and Innovation Fund Annual Report 2020 in anyandallcapacitytomakeIllinoisthetruehubofMidwesttechscene. look forward to our continued work with the startup and venture I Illinois. across founders in invested be to continue capital investment additional ensure capital to seek I ecosystem and contributing with the United States accounting for over 70% of all regions venture key few capital a in investment. concentrated highly As is investment capital State venture perspective, Treasurer, global a From • • • Illinois StateTreasurer Onward, www.ILGIF.com For moreinformationonourIllinoisGrowthandInnovationFund,pleasevisit startupshavethenecessarycapitaltoremainandthriveinIllinois. tech-enabled companies. This vehicle will be a catalyst to ensuring promising tech-enabled vehicleseekingtoprovidethemuch-neededlocalfollow-oncapitalexpansion-stage capitalwithtraditionalventuremanagers. CorporateVentureluncheoninDecember2019tofurtherconnectcorporateventure afterreceivinginvestmentsfromourfundmanagers. investedacross157Illinoiscompanieswhile40portfolioopenedoffices Launch ofthe1818Fund– First IllinoisCorporateVentureLuncheon- Attracting BusinessesandPrivateCapital- . Wesuccessfullylaunchedthe1818Fund,aco-investment Weco-hostedthefirsteverIllinois Over$3.2billioninprivatecapitalwas capital and attracting funding. Where more common financing channels may not be available, beavailable, not may channels financing common venture capital/growth equity provides at-risk more capital for many of these early innovative companies. Where funding. attracting accessing and in difficulties capital face cycle, life business the of stages all across companies, these of many they create, apply, and adapt breakthrough technologies and innovative business models. However, employment options. These innovations are generated by businesses at all stages of development as offers an opportunity to boost economic growth, improve living standards, and generate a variety of innovation Startup revenues. business venture-backed of form the in GDP U.S. of 21% delivers GDP, but of 0.2% only up makes investment venture Annually, the sector. in investment other growth any employment than U.S. and economic more generated has capital venture decades recent in example, For economy. local the throughout growth driving to critical are companies Tech-enabled increasing jobs,revenueandeconomicactivitywithintheIllinoiseconomy. State InvestmentsportfoliowhilespurringeconomicdevelopmentacrossIllinoisultimately, growth equityallowtheIllinoisTreasurertoprovideastronginvestmentperformancefor Illinois tech-enabledbusinesses.Extrinsically,investinginventurecapital,privatecredit,and the OfficeofIllinoisStateTreasurer(“IllinoisTreasurer”)toprovidemuch-neededcapital To facilitatethegrowthofcompaniesinIllinois,IllinoisGrowthandInnovationFunallows Why InvestinVentureCapital? opportunistic co-investments. funds annuallyandleverages strategy investsin10-15 Fund-of-funds investment investment strategy. investment objectivesand authority andcontrolbysetting The IllinoisTreasurerexercises About theIllinoisGrowthandInnovation Fund FUND OVERVIEW Learn more atwww.ILGIF.com tech-enabled companies. capital receivedinIllinois aggregate amountofcommitted invest aminimumoftwice the ILGIF managersarerequired to cycle. annum overa10-yearinvestment approximately $100m-$125mper The Fundaimstoinvest 5 Illinois Growth and Innovation Fund Annual Report 2020 6 Illinois Growth and Innovation Fund Annual Report 2020 The goalsofILGIFaresimple: ILGIF Goals venture capital,growthequityandprivatedebtfirmswithanexustothestateofIllinois. quality technology-enabledbusinessesinIllinois.Wedothisbymakingtargetedinvestmentswith (“ILGIF”), anevergreenimpactinvestmentfund,willinvestinwaysthatattract,assistandretain Established byIllinoisTreasurerMichaelW.Frerichs,theGrowthandInnovation Overview fund designed to allocate capital on a recurring basis, in perpetuity, to be invested with Illinois with invested be to venture capital, growthequityand privateventuredebt investmentfirms. perpetuity, in basis, recurring a on capital allocate to designed fund evergreen an as structured was ILGIF Furthermore, portfolio. investment existing State’s the from years 10 over capital investment available in billion $1 approximately to total the increasing ILGIF, In 2018, Treasurer Frerichs announced an increase to the amount of investment capital available in million IllinoisGrowth andInnovationFundbeganmakinginvestments inmid-2016. $222 the launch and establish to authority legislative II TDA the used Frerichs Treasurer 2015, In did notactontheauthorizationforanumber ofyears. Lawmakers in 2011 authorized a second round of TDA funding, Icreated called TDA II. However, the treasury TDA firms. capital venture Illinois to investments in approximately 6,300jobsandgeneratedmore than$150millioninprivateinvestment. million $74 of 2002 round in initial lawmakers I”), the (“TDA I Account Development Technology the named Legally History ofILGIF income communitiesberecommendedforinvestment. low-to-moderate or communities diverse in and located geographically businesses managers and/or disabilities fund worthy enable to inclusion with persons or veterans, military women, minorities, by owned companies technology promising broad in supports ecosystem and venture encourages growing ILGIF the supporting Illinois. and leveraging and by entrepreneurial Illinois engaged in and community inclusive venture connected, more a foster to seeks ILGIF Moreover, canbe green, healthcare,logistics,manufacturing,andservicestechnology. businesses Tech-enabled in Illinois. workforce situated significant in industries such as, but not a limited to: agricultural, biology, consumer, possess financial services, or Illinois in based equity, and private venture targeted debt funds that invest makes in technology-enabled businesses and are Treasurer either Illinois the ILGIF, Through Mission investing. Theyareessentialtoeffectivegovernanceandinvestmentoutcomes. of alignment and practices, best governance transparency, optimize to seeks ILGIF Vision projectedrisk. 5. Integratesustainability/ESGfactorstoincreaseexpectedfinancialreturnsandminimize promisingtechnology-enabledcompanies;and 4. Supportequity,diversityandinclusiontoenableworthyfundmanagersgrow inIllinois; 3. Foster a more connected, inclusive and engaged entrepreneurial and venture community 2. DriveeconomicdevelopmentforIllinois; 1. DeliverstronginvestmentperformanceforIllinois; investments ih etr cptl growth capital, venture with interests when authorized Fund

5 4 3 system/files/2019-11/qgdpstate1119.pdf. 2 does inChicago. it than Area Bay the in capital more 1.5x requires C Series to seed from ownership 10% retain to Investors in Chicago invest less to retain the same ownership over time. For example, an investment more generalpatents,andpatentsclosely relatedtofundamentalscience. patents, original more have to likely disproportionately are thanthe companies venture-backed patents; economic importance and quality ofhigher are average patent. For instance, 29.4% of the venture-backed patents startups are in the top 10% VC-backed of most-cited by filed Patents Illinois, Indiana,Michigan,Minnesota,Ohio,andWisconsin)represented8.3%in2019. (including region Lakes Great the terms and U.S. In the in 2018. deals of in 2.8% represented 1.4% Illinois count, from deal of up value, deal total of 1.6% represented Illinois up 2018. country, in the 3.6% in from value deal venture total of 4.2% represented region Lakes Great the 2019, In • • and 35Fortune500companies. million 9.5 of population a has area metro Chicago the particular, In Analysis. Economic of Bureau for accounts the to according region companies, 500 Fortune 113 and Midwest consumers, million 52 GDP, total The in trillion $2.7 formation. value and growth, productivity innovation, creation, economy-wide job term to important disproportionately are startups Venture-backed https://www.gsb.stanford.edu/insights/how-much-does-venture-capital-drive-us-economy http://about.crunchbase.com/wp-content/uploads/2020/05/americas_mighty_middle_FINAL.pdf https://pitchbook.com/media/press-releases/us-venture-capital-investment-reached-1309-billion-in-2018-surpassing-dot-com-era “Gross DomesticProductbyState, SecondQuarter2019,”Bureau of EconomicAnalysis, November7,2019,https://www.bea.gov/ leader inthenationforvaluetoitsinvestors. raised duringthe year. million This represents34.6% growth from2018. Chicago isalsoa ranked 6th in the country in terms of amount raised by venture capital firms with $721.1 ($257.7B AUM), Massachusetts ($60.2B AUM), and New York ($57.1B AUM). In 2019, Illinois management. Thisrepresents6.5% growth from2018. The topthreestateswere California ranked In 2019, 4th inthecountryterms Illinois of AUM in 2019 with $9.7 billion under 2014 and$8.9billionbetween2015-2019,representinga36.9%increase. between 2010- companies raised$6.5billion Illinois Mountains). and theAppalachian among heartlandstates(the25betweentheRockyMountains amount highest Moreover, between 2010 and 2019, Illinois companies raised $15.4 billion, the second- medical technologies key tocreatingnewdrugsand (“NIH”) researchfunding,the Institutes ofHealth competitive National 34% ofhighly development, including based researchand 31% patents corporate anduniversity 26% ILLINOIS VENTURECAPITAL LANDSCAPE

of U.S.university- of thenation’s

GENERATES . MIDWEST REGION

• • • 4

5 United States awarded inthe education degrees 32% graduates 33% holders bachelor’s degree nation’s total 35%

of itsSTEM of allhigher of the 3

2 long- 7 Illinois Growth and Innovation Fund Annual Report 2020 8 Illinois Growth and Innovation Fund Annual Report 2020 have-ways-to-go/ 7 6 https://www.americaninno.com/chicago/inno-news-chicago/chicagos-vc-firms-are-more-diverse-than-they-were-2-years-ago-but-still- Ibid,. in Chicagolandcontinuetogrowandattractinvestmentfromcoastalinvestors. which was at seed (seed ratio of 7.2%). This demonstrates that venture-backed companies 2019, venture-backed companies inGreaterChicagoraised$15.2billion,$1.1billion of in theheartlandstates,GreaterChicagorepresentsmostactiveregion.Between2010- Seattle (4.8x),LosAngeles(4.7x),andNewYorkCity(4.4x).Intermsofleadingmetroareas with amedianMOICof5.6xfrom2006to2018.Bycomparison,thenexttopcitieswere Chicago-area startups have generated the highest median MOIC of all major tech cities, and 33%arewomen. from are non-white ethnic or racial groups. 11% of startup teams are Black or Latinx 13% and women are CEOs venture-backed of 20% Additionally, groups. racial or ethnic non-white from are 14% and women Greater are in Chicago capitalists venture of 28% decision Blend, Chicago by women collected data of to percentage venture the among Raise, diversity makers in the U.S. venture capital industry All was only 12% in 2019. of According to terms According in excels capitalists. area Chicago Greater The 7 6 8 The investmenthighlightsasoftheend2019arefollows: of fees. 31, 2019, net IRR increased from 8.0% to 12.5%, while TVPI remained relatively strong at a 1.16x net fund’s the performance inception, metrics measured Since by IRR promising. and been TVPI have has improved. From performance inception through investment December 2016, of middle the in While ILGIF is still in the initial stages of investment, with the initial influx of capital being deployed Minority, Women,Veteran, andDisabled-owned (MWVD). $44 million invested with $44 millioninvestedwith MWVD-Owned funds new commitments $119.5 millionin 2019 ILGIFInvestmentHighlights ILGIF InvestmentPerformance ILGIF InvestmentPerformance including 2first-timefunds $143,583,616 TotalValue $136,605,655 ofInvestedCapital 1.16x NetTVPI 12.5% NetIRR INVESTMENT 12 newfundinvestments Seeded 2newearlystage * venture funds As ofDecember31,2019 5 fundcommitmentsto MWVD-Owned funds Co-Investment Fund Launch of1818 8 9 Illinois Growth and Innovation Fund Annual Report 2020 10 Illinois Growth and Innovation Fund Annual Report 2020 Ventures andHydeParkVenturePartners. Chicago including managers fund local with investments re-up multiple as well as Partners, Equity Vista and Group Vistria with investments Significant founders. underrepresented in investing firm Other notable investments in 2019 include Chingona Ventures, a Chicago-based early stage venture innovation First LeafCapital. the leverage with to investment an with Urban-Champaign and at Illinois of University investments the underpins that our ecosystem of representation geographic the broaden to ILGIF also invested in our first venture fund located outside the Chicago metro area Illinois in Savoy, Illinois the alone, 2019 In Illinois. of state Treasurer made12newcommitments,including8fundmanagers. the across businesses tech-enabled are who in managers fund investments 36 across million $304 of total a committed ILGIF 2016, Since Investment Activityin2019 companies: At the conclusion of 2019, the 1818 Co-Investment Fund made five total investments in the the necessarycapitaltoremainandthrivein Illinois. interest in the State. This vehicle will be a catalyst to ensure promising tech-enabled tech-enabled startups have late-stage to vested significant a hold who companies Illinois-based growing capital to managers, fund ILGIF alongside follow-on local the capital investment target opportunistically to provide ability the ILGIF provides Fund 1818 The companies. to seeking vehicle investment 1818 the launched successfully Treasurer Illinois the events, notable other Amongst Launch of1818Fund Key InvestmentUpdates Fund, a co- a Fund, following targeting dialogue, andultimately-investmentactivityamongsttraditionalcorporateVCs. This would help bring together disparate and varying venture efforts in order to spur connections, annual an host will over80venture corporate venture summit we in had 2020 that allowing, would augment and complement Pandemic our annual ILGIF attendance. event Summit. in The stakeholders venture and firms. capitalists venture corporate and firms capital venture traditional a precursor to a planned corporate venture summit to further increase the collaboration amongst in luncheon Venture IllinoisCorporate first the co-hosted Illinois Treasurer The Corporate VentureLuncheon First Latina-ledFundinIllinois First InvestmentinCentralIllinois stage venturecapitalfirmhereinIllinois. early an operating and founding partner general Latina first the is Ventures founders in underrepresented led by former investing Math firm Ventures venture principal Samara stage Hernandez. early Chingona Chicago-based a is ILGIF invested in the only Latina-led venture fund in Illinois. Chingona at Urban-ChampaignthroughaninvestmentwithFirstLeafCapital. to leverage the innovation ecosystem that underpins the University of Illinois seek to and representation geographic broaden to Illinois Champaign, area metro Chicago the outside located fund venture first our in invested ILGIF December 2019 as 2019 December Ventures

11 Illinois Growth and Innovation Fund Annual Report 2020 12 Illinois Growth and Innovation Fund Annual Report 2020 projections for attracting private capital to Illinois. Moreover, ILGIF portfolio companies held 327 held companies portfolio ILGIF Moreover, Illinois. to capital private attracting for projections initial our exceeding well companies, Illinois 157 across invested been has capital private in billion $3.2 Over billion. $16.5 totaled revenue GAAP aggregate total the companies, portfolio all Across receiving after offices Illinois initial opened of have time investments fromourfundmanagers. from companies employees portfolio full-time 40 new 2,732 Furthermore, of investment. increase an represents which Illinois in employees full-time 6,300 Across over goal. are there this companies achieving IL-based 157 in over strides including companies, significant 625 make to continues ILGIF 2019, of end the of As positioning IllinoisastheanchortoMidwesttechandentrepreneurialecosystem. Midwest, the across interest spur further will which Illinois capital, private-sector in significant attract jobs and 60,000 approximately create economic to an expected be are ILGIF to through seeks Investments also catalyst. ILGIF goal, key a is performance investment While patents acrossallportfoliocompaniesasofyear-end2019. 2019 2018 2017 2016 OWNED BY VETERAN, OR DISABLEDPERSONS NUMBER OFFULL-TIMEILLINOIS IN AGGREGATEGAAP REVENUE INVESTED IN82BUSINESSES INTERNAL RATEOFRETURN Impact SinceJanuary1,2016 $16.5 BILLION EMPLOYEES $3.2 billion $2.58 billion $825.5 million $432.6 million Capital Invested MINORITIES, WOMEN, 12.5% 6,300 TOTAL DOLLARAMOUNTCOMMITTED ECONOMIC IMPACT $1.97 billion GAAP Revenue $16.5 billion $22.3 billion $8.9 billion $304.0M MINORITY &WOMEN-OWNED FUNDS CONTINUE TOIDENTIFY, RECRUIT& (as ofDecember31,2019)

MULTIPLE ONINVESTEDCAPITAL $121.5 MILLIONINVESTED IN RECOMMEND MWVDFUND $3.2 BILLIONINVESTEDIN MANAGERS/BUSINESSES ILLINOIS COMPANIES 4,000 Jobs 6,300 5,560 3,730 1.16X

37 IL Companies 157 125 79 development

EQUITY, DIVERSITY, AND INCLUSION Select FundManagers million investedasofyear-end2019. 40% ofinvestedcapital,withanaveragechecksizeover$8million,andatotal$121.5 There are15MWVD-ownedmanagersaswell the Statistics havejumpstarted Blend asChicago such organizations local conversation aroundequity,diversity,andinclusion. efforts, our to addition In This evaluationprocessappliestobothnon-MWVDandMWVDventuremanagersaswell. based on what fits inside the box, but also by thinking creatively, with ingenuity, andprospective) are furthering these ideals withthat are held so compassion. near and dear. By willing to invest not solely due the into Treasurer assessments and (current managers venture whether evaluate better inclusion to Office the Illinois allows This process. diligence and diversity, the equity, integrating impact, by forward economic ball the and push to performance investment to addition In EQUITY, DIVERSITY, AND INCLUSION EQUITY, DIVERSITY, AND INCLUSION net i tcnlg cmais ht r invtn wti ra estate, real within innovating are that mortgage, finance,insuranceandhomeservices. companies technology in invests firm founded in 2015 by Constance Freedman. As a woman-led firm, Moderne capital venture stage early an is Illinois, Chicago, in based Ventures, Moderne s el s o Agls n Alna Bihwo i 10 African-American 100% is Brightwood Atlanta. owned. and Angeles Los as well as States. Brightwood United holds its headquarters in New York with officesthe in Chicago within companies to solutions capital equity and debt in providing specializing firm lending market middle a is Advisors Capital Brightwood firm. women-owned a is businesses. Engine Impact Seitz, Tasha and for-profit Yagan Jessica by Founded capital human and financial invests in investing that firm capital venture early-stage and seed based Chicago a is Engine Impact both of history a following Nesbitt ownedfirm operating andinvestingexperience. Marty and anAfrican-American Kirkpatrick is Kip by founded Vistria sectors. services financial and healthcare education, the within companies market middle lower U.S.-based in invest to 2013 in founded was Illinois, Chicago, in based Group, Vistria The

85 MWVD-ownedportfoliocompanies,totaling continues continues 13 Illinois Growth and Innovation Fund Annual Report 2020 14 Illinois Growth and Innovation Fund Annual Report 2020 board seatsforinternalcommitteesandportfoliocompanies. investment teams of the Management Company as well as the consideration of diverse persons for equity capital/growth managers venture seek to identify, which recruit, promote and retain in diverse persons within provisions the junior and requests senior also ILGIF diverse- investments. on prospective diligence for conducting and consideration identifying when factor prioritize significant a provisions as companies portfolio These owned ILGIF. through capital/ managers venture all equity with negotiated growth and requested are provisions letter side invests, Treasurer As part of our steadfast commitment to increasing diversity among the entities in which the Illinois Diversity CommitmentsProvisions Select MWVD-Companies high-quality caterers,venues,andplannersinaone-stopshopforclients. Partyslate is a Chicago-based platform that serves as a marketplace that provides and managingpeoplewithobsessive-compulsivedisorder. NOCD is a Chicago-based digital behavioral health company focused on identifying children weekly teaching one-on-one virtualsessions. through coding in and programming computer specializes 6-13 of that ages the start-up between Chicago-based a is Codeverse cross- of provider a border logisticssolutionsbetweentheUnitedStates,MexicoandCanada. as serving company portfolio Illinois-based an is Forager system (“CNS”), andrarediseasetherapeuticsareas. nervous central immunology, oncology, the in development clinical stages of all across investments equity direct make will Agent Vemuri, Geeta Dr. Founded by needs. patient unmet address that biotherapeutics differentiated novel, in investing on focused firm capital venture multi-stage a is Capital Agent may have a material and relevant financial impact on the safety and/or performance of ILGIF performance and/or the safety on that impact factors investments. financial risk relevant sustainability and integrate material a and have evaluate, may recognize, to responsibility a has ILGIF maximize to order anticipated financialreturns, minimizeprojectedrisk,andmoreeffectively executeitsduties. in ownership investment and diligence due management, risk construction, Treasurer Illinois the 238), ILCS integrates sustainability (30 factors into its Act investment decision-making, Investing investment analysis, Sustainable portfolio Illinois the to Pursuant Sustainability/ESG to makeatwotimesaggregatecommitment toIllinois-basedcompanies. or headquartered required are managers Moreover, Illinois. of are State the in presence significant have otherwise that that companies tech-enabled in investing of record track sizeable a have that managers with partners ILGIF presence, physical to addition In nexus. Illinois an establishing Illinois, in domiciled partner managing one least at or Illinois, in employees its of (50%+) majority ILGIF targets investments with managers that are technology-focused venture capital firms with a Illinois byleveragingandsupportingthegrowing technologyecosystemlocatedinIllinois. venture and entrepreneurial engaged and connected more a foster to seeks ILGIF Illinois Nexus Please click parameters toensureprudenceandcareintheexecutionofourinvestments. oversight management the in flexibility enough process to for take advantage of allow investment opportunities to as they designed arise, while is setting forth reasonable Policy Investment ILGIF. supporting The while actions effective and prudent lawful, take services, provide to retain we The ILGIF Investment Policy is designed to ensure that the Illinois Treasurer, as Investment Policy income communities. Illinois-domiciled in co-invest low-to-moderate communities or in diverse located (ii) geographically persons, and/or disabled or and managers fund veterans, in military women, minorities, by led and/or owned 50% invest than more (i) are that companies and identify to seeks ILGIF Lastly, logistics, manufacturingandservicestechnology. such as, but not limited to: agricultural, biological, consumer, financial industries services, green, healthcare, in situated be can businesses Tech-enabled Illinois. in workforce significant a possess equity, growth venture, or Illinois in based with either are and businesses tech-enabled investments in invest that funds credit targeted private and make to billion $1 approximately equaling Through ILGIF, the Illinois Treasurer is authorized to allocated 5% of the State Investments portfolio, investment strategy; approximately investments per Fund offund Business Investment year Companies (SBICs) ILGIF willseekto invest in here 10-15 toaccesstheILGIFInvestmentPolicy. Small

about million ILGIF willinvest INVESTMENT STRATEGY perpetuity

$100 to$125 annuallyin diversity portfolio companies their staffand commitment to demonstrate a Managers will , bothamong Typical commitment size rangesfrom $2.5M to$15M propsective investments sustainability factors when evaluating to ILGIF willseek incorporate time offinalclosing of Minimum fundsize (exceptions apply) $5 million atthe well as any contractors Mangers willutilize reputable service investment portfolio providers will be stage, sectorand across vintage, ILGIF’s fund community in community strategy. diversified prudently

15 Illinois Growth and Innovation Fund Annual Report 2020 16 Illinois Growth and Innovation Fund Annual Report 2020 au pooiin rs mngmn, n ivsmn onrhp gvn ht hs tnil and tangible these that given ownership, investment prospective and management, diligence, risk due proposition, value and portfolio analysis of components investment as decision-making, innovation, investment and model construction, business (5) and capital, human (4) capital, social (3) environmental, (2) leadership; and governance corporate (1) to limited not but including, factors within a framework predicated on the prudent integration of material sustainability factors, sustainability integrate managers investment how assess to is goal The equity. private and capital venture across Questionnaire Diligence Due Sustainability formal a institutionalized ILGIF 2019, In Founded in 2017, Afresh is the only modern fresh food (produce, meat, seafood, bakery and food food and bakery seafood, meat, (produce, food fresh modern only the is Afresh 2017, in Founded Green Companies of chemical products and processes to eliminate the use and generation of hazardous substances. reduces greenhouse gases or carbon emissions; or means (c) technology” involves the “Green invention, design, (b) efficiency; Illinois. energy or energy, renewable and energy, clean promotes (a) company application in a that technology located businesses technology” “green in invest to ability and/or experience demonstrated have that managers fund with invest to strives ILGIF Green Preference fund or portfolio ofaninvestment view morecomplete a company’s performanceonmaterialfactorslikelytoimpactitslong-termvalue. it provides accounting, financial to used to evaluate past performance and for future planning and decision-making. As a complement The sustainability analysis adds a layer of rigor to the fundamental analytical approach and can be intangible factorsmayhavematerialandrelevantfinancialimpacts. accelerate stockturns,andimprovegrocers’top andbottomlines. freshness, food increase waste, food reduce significantly that solutions operations service) optimization company. They AI-powered merchandising, ordering, and store to yourdoorstep throughtheirmonthly subscriptionservice. home eco-friendly essentials delivers such as household Francisco, cleaning, personal care, San baby and pet in products directly headquartered Collaborative Grove solutions tofeedthegrowing populationandtohelpendthesugarepidemic. to transform the flavor and value of agricultural products. Their platform missionfood-processing based isfungi utilizes toColorado, in develop based MycoTechnology, and gettingitsediblesurplusfoodtolocalcommunities inneed. line bottom landfills, from emission greenhouse organization’s its reducing donations, tax charitable an through improving by solution triple-win a provides Goodr plants, aswellofferingfulllifecycleservices forforestrymanagement. the protect to spray and swarms drone using vegetation and trees native plant to DroneSeed seeks to make reforestation scalable. They work in post-fire environments an express an and entrepreneurial ecosystemwithin Illinois. manager inclusive and diverse development more a fostering economic and optimal generating while for State simultaneously the for returns investment aims maximize to portfolio diversification across vintage, investment stage, sector and strategy ILGIF’s private in invested credit fundsinvestinginIllinoiscompanies. be to targeted is 10% remaining targeted the is while funds equity growth market middle capital towards the of 35% rounds. fundraising B Series and Series-A, Seed, Pre-Seed, to limited not but including, stages various across investing strategies to allocated portfolio overall the of 55% of target a with venture towards biased heavily is that construction portfolio a maintain to seeks ILGIF Portfolio Construction PORTFOLIO aia strategies capital TARGETED PORTFOLIOALLOCATION ILGIF SECTORALLOCATION 17 Illinois Growth and Innovation Fund Annual Report 2020 18 Illinois Growth and Innovation Fund Annual Report 2020 and manufacturingtechnologies. diversifiedare across sectors includingcompanies financial services, logistics,Illinois-based life sciences, health care,Notable consumer companies. IL-based 157 including manager fund ILGIF an an received have companies 625 2016, in capital of deployment initial the Since Select PortfolioCompanies diversification byinvestingcapitalinfutureyears. different across invest to vintage years and is forecasted to continue ability to increase the structure, has fund that evergreen ILGIF an As 2015. in beginning years vintage fund five across percentages following the the within invested has ILGIF risk 2019, year-end of cycle As portfolio. market of impact the limiting diversification, year vintage on focuses ILGIF allocating capital. when implemented is diversification year vintage proper to timea ensure to important is it cycle, market investor market any private for difficult equity is growth on and impact capital an venture has certainly timing consequent The Vintage Year credit in totalcommitments. in 7% equity/ and million $304 totaling million) ($22.5 strategies focused million), growth ($125 in strategies 41% buyout strategies, capital ($156.5 venture capital invested of 52% with As ofyear-end2019,ILGIFwasdiversifiedstrategies Strategy Diversification t management. dining experience fortakeout,delivery, reservations,and eventmanagement. platform, they connect high-end restaurants with consumers allowing for a unique Tock are locatedinairports, universities,hospitalsandoffices. that snacks and meals restaurant-quality chef-curated, with stocked “fridges” meal options and sells them through its temperature-controlled, smart vending Based in Chicago, for smalltomid-sizebusinesses. the fastest-growing tech companies in America providing best-in-class fulfillment Founded in 2014 by Dhruv Saxena and Divey Gulati, starting at$50. celebrities to individuals connect to way unique a in success of lot a made has Cameo from, choose to celebrities of thousands With fee. a for celebrities from Launched in 2017, andfrictionless collaboration acrosstheecosystem. experience seamless one with offering visibility chain supply third-party logistics firms. project44 is the industry’s first and only unified global project44 offers access to unique culinary experiences around the world. 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ecosystem Networking buildingrelationshipsacrossthe venture universities, andentrepreneurs local acceleratorsand incubators, angel investors, Representation acrossventure capital, growthequity, Over 250Attendees 2019 ILGIFSUMMIT 2019 ILGIFSummitHighlights venture 19 Illinois Growth and Innovation Fund Annual Report 2020 20 Illinois Growth and Innovation Fund Annual Report 2020 and anyotherILGIFissues,asrequestedbytheIllinoisTreasurer. activities, fund of assessment investments, portfolio of review issues, critical and of study the include activities investment our review to is Council provide judicious advice to the Advisory Office of the Illinois State Treasurer. ILGIF Advisory Council activities may the of objective primary The impact ofILGIF. and operation purpose, the on information with public the of members and stakeholders provide to Capital South 50 and Treasurer the with collaborating actively community, business technology The ILGIF Advisory Council serves as a general resource to the entrepreneurial, ILGIF AdvisoryCouncil EnterpriseWorks, IllinoisHispanic ChamberofCommerce, andInnovateSpringfield. Notable strategic partners include 1871, Chicago Innovation Exchange at the University the impactandeffectivenessofILGIF.Keystrategicpartnersincludefollowing: The Treasurer, through ILGIF as well as all vendors, works with several strategic partners Strategic Partners • JackLevin Below aretheindividualswhoservedonadvisorycouncilin2019: • RyanMundyKristaHatcher • DavidBaker

• MauraO’Hara The Illinois State Treasurer and his staff exercises authority exercises staff his and Treasurer State Illinois The ces o etr cptl piae qiy n hde ud. t s a is It wholly-owned subsidiaryofNorthernTrustCorporation. funds. hedge and equity private capital, venture to access firm designed to meet the core strategic needs of investors seeking 50 South Capital Advisors, LLC is an alternatives asset or using policy setting internally by either contractors. executes ILGIF, staff of which management procedures and the over control and

STAKEHOLDERS

• ShariYoung-Lewis • MeghanOtis •PhilNevels

• KeithCrandell venture capital and • Omar Duque Omar • management to maximize of Chicago,

and thedepthofourtalented techecosystemhereinIllinois. successes our showcase to 2021 in road the on be to plan we 2020, for plans our foiled pandemic road Illinois-centric an take entrepreneurs, will venture capitalists, and stakeholders we to TechCrunch in San ecosystem, Francisco. Although the tech Illinois’ of visibility the Increasing TechCrunch 2021 venture local ecosystem. the into pool talent diverse a retaining and attracting of hopes the with Illinois, based in funds venture on focus will program the Moreover, equity. private and capital venture in opportunities career about further learn to universities and colleges black historically at students In partnership with HBCU.VC as well as 50 South Capital, ILGIF is looking to foster HBCU.VC Internship and educate to diligence due and operations, promote amorediverseventurecapitalecosystem. strategies, their into mentorship and guidance will have the benefit to establish relationships with ILGIF venture capital firms in Illinois to provide significant potential in venture capital. Moreover, those invested through the ILGIF Scout Initiative possess that individuals identify to seek will initiative The communities. underserved in investing The ILGIF Scout Initiative will provide capital either for investing by underrepresented founders or ILGIF ScoutInitiative traditional andcorporateVCs. varying efforts in order to spur connections, dialogue, and ultimately, investment activity amongst would that augment and 2020 complement our annual ILGIF in Summit. This would help bring summit together disparate and venture corporate corporate annual an and host will firms we allowing, capital Pandemic firms. venture traditional amongst collaboration the Increasing ILGIF CorporateVentureSummit in Chicago,IL. communities underrepresented and marginalized in invest to pipeline the in initiative an have we why is That gaps. wealth long-standing closing in tool potent a is Entrepreneurship marginalized. and vulnerable communities entire left have undercapitalization and disinvestment of Decades economic increasing toward broad push swaths of Chicago, continued not just our those parts of is the city known forward for their moving entrepreneurial bonafides. objective main A Economic Equity twelve toeighteenmonths. ILGIF looks forward to capitalizing on these select strategic initiatives gearing to launch in and capital venture further promote growth withinIllinois. and innovation further to drive to avenues new objectives, explore to and Illinois, investment in innovation technological primary three our towards to continue will ILGIF program, the expand to continues Treasurer Illinois the As FUTURE SELECTINITIATIVES

opportunities for commit capital commit qiy to equity the next hw of show venture 21 Illinois Growth and Innovation Fund Annual Report 2020