While working on building a new home in downtown Springfield, University of Illinois Springfield's business incubator is rolling out some new, innovative programs to expand its resources and services, highlighting access to expertise and sources of startup venture capital for entrepreneurs. Innovate Springfield, which currently offers its members support such as office space, business planning, market survey and logo design assistance, will be expanding to an additional three floors in a nearby building at 441 E. Adams St. to launch the Tech X Lab. That space across the street will offer 3D printing maker space, an AI lab, conference areas and classroom space, according to director Ben Hage.
"We needed to get closer to main street itself, so people can see us," Hage said of the annex, located across the street from its current address at 15 Old State Capitol Plaza.
In 2022, the university's board of trustees purchased the three-story, 26,400-square-foot building at 401 E. Washington St. from the Illinois Sheriffs' Association for the UIS Innovation Center. When renovations are completed, the UIS Innovation Center, which provides entrepreneur support and community and professional education programs, will become the new home for Innovate Springfield and the Tech X lab, according to Rob Kerr, executive director of UIS Office of Innovation.
In addition to directing operations of the UIS business incubator and working with the Sangamon CEO program for area high school students, Hage facilitates entrepreneurship education along with Illinois Ventures, which offers investment capital for early-stage companies focused on physical sciences and life sciences. It helps start and build businesses based on innovations from University of Illinois.
Illini Angels, a program of Illinois Ventures established in 2023, draws talent, ideas, startups and members from all three University of Illinois System campuses. Illini Angels is a powerful cohort of investors – a team that brings decades of experience in investing, innovating, building strong companies, establishing connections and encouraging the highest-impact relationships. Illini Angel investors must meet the Security and Exchange Commission's guidelines for accredited investors and pay annual membership dues.
Paul Magelli, the inaugural director of Illini Angels, is an entrepreneur and a pioneer in big data and analytics. He recently spoke to a group of idea-stage entrepreneurs gathered at Innovate Springfield and said, "When you're starting a business, it often feels like you're trying to cross a desert and climb a mountain."
Magelli's presentation focused on taking educated risks and learning from mistakes. He emphasized that failure should be celebrated because it often leads to success. "Thomas Edison tried about 1,000 light bulbs before he found one that worked. So, 1,000 failures really should be viewed as 1,000 successes," he said.The Illini Angels investment network targets the needs of entrepreneurs in the incubation stage, where 10% or less of companies actually get funded. "Angels cover the breach they face to get across that desert," according to Magelli.
Venture capitalists invest other people's money and are expected to return more money than they were given to invest. In contrast, the Illini Angels are a group of some 80 Illinois industry leaders and mentors, driven to contribute their own money in the early stages of a company's development with no hard clock on returns. "Angel funding is what we call 'patient capital,' as returns can be unpredictable and very long term," said Kerr.
Any entrepreneur in the Springfield region who has an idea for a business might start by participating in programs at the UIS Innovate Springfield incubator, which are open to nonmembers as well as members. Periodically, Innovate Springfield will hold workshops and presentations introducing the Illini Angels program to entrepreneurs. After promising startup members are fully prepared with a pitch deck – including a business plan, industry research and a timeline – Magelli will arrange for them to introduce their idea to interested angel investors who may be compatible.
"In the early stages, Angels invest in an entrepreneur founder and their idea, not in an established business," according to Kerr.
Larry Sweat is CEO of Springfield-based Bi-Petro, a Midwestern leader in the crude oil industry. As an Illini Angel, he mentors entrepreneurs and shares his decades of financial experience when it comes to running and growing a successful company. After graduating from U of I in 1980 with a degree in accounting, Sweat joined Bi-Petro in 1982 as controller, became treasurer in 1989 and was named CEO in 2000. He currently serves on the board of directors.
Sweat has years of experience working alongside blue-collar families trying to make a living in the oil production and refining market, which taught him a great deal about balancing risk. To him, angel investing is a relationship that is more than writing a check. It includes seed funding, much-needed advice and mentorship with an excellent connection built on trust and clear communication. He noted that a good entrepreneur gives regular updates to the investors and must always have a Plan B.
The Illini Angels program provides opportunities for alumni, students, faculty and board members to stay connected to the university community by offering their passion, expertise as mentors and financial support of startup companies affiliated with the U of I network.
"This is almost philanthropic. It puts money back into the economy, with growth of jobs and creative ideas. But it can be high risk," Sweat said. "It's not for the faint of heart."
