The fact that the Chicago VC/angel establishment is not constantly funding Google takeover targets (or on TechCrunch all the time) doesn't mean we don't exist...it just means we work differently. We're definitely much smaller than the Boston and SF contingent, but we're here if you look.
Succinctness is a virtue that I lack.
I think much of the answer is historical, but part of the answer is also cultural (and these two factors intertwine and reinforce each other.)
Historically, Chicago technology startups have tended to be more industrial and/or infrastructure focused than the startups in other hubs. There isn't a major,'exciting' Yahoo or Google-type company headquartered here that gets lots of press and that will buy a non-profitable startup from you. Instead, there is Motorola and companies like that. There simply isn't the strong history of computer-oriented VC firms in Chicago like there is in Boston and SV. Part of that is just historial anomaly (owing to Stanford and Shockley, etc)...but the ripples in SV and Boston turned into waves because people nurtured them. Some places needed technology to become a major industrial base, so their economy and education system rewarded technology research and technology startups. That is not the case in places like New York or Chicago, which have plenty of other industries to keep all the yachts afloat. Of course, once an area builds the infrastructure and the talent pool, it tends to just feed on itself and amplify, making it difficult for other places to catch up.
Culturally, Chicago is a fairly pragmatic city...there isn't as much of an interest in the flashier, consumer-focused startups as there is in Silicon Valley. The "IPO or Flip or Die" strategy is much more prevalent in the Valley or Boston, whereas internet companies in Chicago tend to be more interested in slow, organic, profitable growth. Investors in Chicago are more risk-averse and are not likely to invest in something that just wants to aggregate eyeballs and figure out a business model later. The downside of that conservative approach is that you will miss out on companies like Google. And you will miss out on fame and excitement. The upside is that you are more likely, statistically, to end up with a stable and profitable company.