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🔙 Highlights from Last Week

Joined Illinois Comptroller Susana Mendoza for a tour of two deep tech hubs: EeroQ and mHUB 👇🏽

We got to see EeroQ’s quantum computer built on liquid helium and how mHUB is fueling Chicago’s next wave of advanced manufacturing.

We hosted Data Night with special guest Eve Jennings 👇🏽

As Chicago’s former Data Services Lead, Eve helped modernize the city’s infrastructure, publish our first AI guidelines, and lead the move to the cloud. She now serves as Cook County’s Director of Analytics.

Chicago-founded Pathos AI announced their $365M Series D 👇🏽

I wrote about Pathos two weeks ago and their vision to partner with Tempus to build the largest foundational model for life sciences. This new raise is a major win for Chicago, from the company’s origins here to the talent they continue to add locally, Pathos is scaling fast. Excited to see what they build next.

How Illinois Rewards Angel Investors

In 2010, my friend Susana Mendoza helped lead the charge on legislation to make Illinois more competitive for startups.

The result: the Angel Investment Tax Credit, which is a state-backed incentive that gives early-stage investors 25% back on qualified investments into Illinois startups.

Since launching in 2011, the program has helped unlock private capital across nearly 3,000 deals.

Let’s discuss:

How the Angel Credit Works

The Illinois Angel Investment Tax Credit offers a 25% state income tax credit, up to $500,000 per investment, for individuals who back early-stage startups. To qualify, investors must hold equity or SAFE notes for at least three years.

Eligible startups must:

• Be based in Illinois

• Have fewer than 100 employees

• Operate in innovative industries like tech, biotech, or advanced manufacturing

Each year, $15M in tax credits are made available on a first-come, first-served basis. The goal is simple: reduce investor risk and unlock more early capital for Illinois companies.

Angel Credit Impact

Since 2011, the Angel Investment Tax Credit has supported 2,815 deals by issuing $105M in tax credits, unlocking more than $424M in private investment.

In 2024 alone, angel investors used the program to back 90 startups across 84 deals, totaling $16.2M in funding. Most of these deals fell in the $250K to $3M range, which is a crucial stage for early growth.

While the credit spans sectors, its impact is especially clear in biotech, life sciences, and deep tech. Startups like ManifestHQ (AI infrastructure), EeroQ (quantum), Reel Decoy (manufacturing), and Beam Alpha (R&D hardware) all closed funding through the program this year.

Bottom line: the credit helps local angels say yes.

📊 Chart of the Week

Chicago’s top seed rounds now reach Bay Area valuation levels more than any other city on this list.

In fact, the top 25% of Chicago seed rounds outpace the median in nearly every other U.S. startup hub.

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📆 Events Around the City

Registration for AI Tinkerers #18 is now live

• June 3

• Hosted by Drive Capital and Bonsai

• RSVP

Building Better Agents

• Monday

• RSVP

Advancing Brain Health

• Monday

• RSVP

Generalist World Meetup

• Wednesday

• RSVP

Cyber & Steak: A Chicago CISO Roundtable

• Wednesday

• RSVP

1 Million Cups Chicago

• Wednesday

• RSVP

World Product Day with Eric Metelka - Building an Experimentation Culture

• Wednesday

• RSVP

Nucleate Midwest: 2025 Demo Day

• Friday

• RSVP

🗞 Previous Newsletters:

#108 - The New Pope and the World’s #1 Prayer App Have Chicago Roots

#107 - Why Healthcare Startups Have an Edge in Chicago

#106 - The OpenAI for Oncology is in Chicago

#105 - Inside the Illinois Lab Using AI to Run Reactors

👋 See you next week!

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