Holed up in a loft in downtown Chicago, eight young tech wizards are flying in the face of recession woes and doing what most big businesses are finding an impossible task – growing.

midVentures, a Loop-based startup, was founded in August by Geoff Domoracki, a 23-year-old University of Chicago graduate who found an untapped niche in today’s grim, financially-struggling internet landscape and turned created a venture that just four months after its inception is reporting estimated monthly revenues of $45,000.

Not a bad return on the $100 each originally invested by Domoracki and business partner Brian Mayer.

The company was born in Chicago, when Domoracki came to a realization: though he was in the Midwest and not Silicon Valley, there were young people there with ideas for profitable technology ventures. But they did not all have the technological skills or financial backing to make those ideas a reality.

“On the East and West coast there are more tech entrepreneurs who have been wildly successful,” Domoracki said. “That’s not the business community in Chicago.”

Enter midVentures, which takes an idea and hires entrepreneurs, designers and software engineers and finds investors, deploying them into a company or start-up idea.

“Essentially we’re their building, team managing, and design team members,” Domoracki said, “to take their vision from zero to reality in months. We build ventures from scratch.”

A typical project lasts anywhere from eight months to two years, the length it generally takes to launch a tech startup.

More than 90 percent of internet startups fail within 120 days of their founding. Recent economic woes have made it even more difficult to create successful internet ventures, as the credit crisis has led to a decrease in lending, hampering cash-hungry startups.

Many fledgling web companies are now being forced to draw down more credit to pay their daily operating expenses. By contrast, midVentures raises its capital through individual investors and by investing its own money.

“We’re not just the development firm, we’re partnered with them,” Domoracki said. “We’re invested in them. We often hold a stake in our clients.”

Last month, Kevin Rose, the founder of news ranking site Digg, told an audience at a San Francisco Web 2.0 conference that financing woes mean less competition and a brighter spotlight on the startups that are being founded.
“It will be one of these little valleys where I believe it will be a great time to do something new,” he said of the credit crunch.

midVentures’s beginnings are even more humble than those of Digg, which started with a few thousand dollars in 2004 and was almost purchased for $200 million this summer by Google.

Domoracki himself oversees eight paid employees at his downtown office, in a trendy artists’ loft. He believes in the profitability and popularity of Web 2.0, a term used to describe social networking sites and other interactive online ventures, doing the bulk of his marketing and networking on the web through Twitter and an active community of more than 125 midVentures fans who track the company’s every move.

Think of midVentures as a fledgling venture capital firm for the young and hip – creating online ventures in music, networking and easy-to-use business tools.

The company is currently working on four major projects, including Remix Galaxy, launching in 2009. Domorocki calls it a cross between iTunes and MySpace for deejays and music remixers.

“There’s currently no website where people who wants to start remixing music can go buy the raw music files,” he said. “Piano, drum tracks — we’ve already acquired a few thousand of them.” He is currently in talks with major music labels about the idea.

Another of the company’s projects is Common Grants, which provides a basic application form for grant money, much like the Common Application is universal for colleges. “When it launches it will be the one Common Grant for grant writing,” Domoracki said.

midVentures is also collaborating with a team of 20 entrepreneurs at DePaul University on the temporarily-named 360newsnow.com. “The same way that YouTube creates the culture of people creating their own videos, well be creating new generation of young people who become expert journalists on their own,” Domoracki said.

The site is an engine which aggregates user postings and comments about the news of the day, allowing readers to see what news is most popular. It also allows users to post and share about trends, community issues, and other topics that would never find their way to a corporate-owned news page.

“This is a way to watch when the next big movement happens direct from the consumer,” Domorocki says. “This will be the place where everyone posts their article or their video.”

The company’s next project is even more ambitious. “Outsource your innovation,” Domoracki said. “You know you’ve got $100,000 for your online budget. We’ll make a proposal for you and we’ll build the marketing and campaign for you, because we’ve got the creative guys who can do that. In the same way that a company outsources its IT, outsource your idea.”

Domoracki’s business plan is simple – to keep growing. “We grow as fast as our clients grow. In the future, we’re looking for people who have resources and ideas but don’t have the technology and expertise to build their concept,” he said. “We’re doing design as well as management now. Can we use other people’s databases, can we use Facebook… how far can we push technology?”