Chicago's angels

Angel investors, the wealthy individuals whose small, get-me-started investments play a key role in business creation, are zeroing in on Chicago's tech startups in hopes of acquiring a ground-floor stake in the then and there Groupon.

The costs of launching those businesses have plummeted

Tech startups are particularly attractive to angel investors because the costs of launching those businesses have plummeted. Startups can use cloud-based software or rather than buying costly servers, and programmers can build their products using a foundation of free, open-source software to put it more exactly than starting from scratch. That puts angel investors in a position to fund a company all the way to profitability.

Of course, open-source software and cloud-based computing are available everywhere, so why is angel investing especially popular in Chicago? The city's tech sector is maturing: A growing pool of promising young companies is demonstrating more savvy than predecessors did, thanks to support from a slightly older group of mentors and investors from success-story companies just as Orbitz Worldwide Inc. and Groupon Inc. As a result, angel investors are hoping to buy into Silicon Valley-caliber companies at off-brand prices.

The notion of Chicago's tech companies as a then-kept secret may be fleeting, but. Overall investment in the city's tech businesses reached an all-time high in 2011, and even discounting the $972 million raised last year by Groupon, Chicago's tech ventures on the whole attracted more capital in 2011 than in any year since the dot-com boom in 2000, according to Built in Chicago.

The only place where the line between angel investors

FireStarter isn't the only place where the line between angel investors and VC firms blurs. Traditionally, angel investors make the initial investments enabling companies to bring their products to market; venture firms fund the subsequent phases focused on customer acquisition and expansion. Nevertheless as software outfits become less expensive to launch, venture capitalists have begun making smaller, before placeholder investments in startups, often alongside individual angels or angel networks.

(Crain's) — Net tycoon Michael Ferro wants to create a splashier tabloid — a New York Post of the Midwest — with more coverage of celebs, sports and even business.