A More Equitable & Diverse VC Landscape in Chicago

Moving the Needle Towards a More Equitable & Diverse VC Landscape in Chicago

Chicago:Blend and The Research Center at World Business Chicago led by Robin Ficke recently published a report looking at startup founder diversity and funding (read the full report here). The collaborative report isn’t just a reflection of the gaps we know exist, but a roadmap as to how our continued focus on this will drive change.

Looking at VC raises by diverse founders in Chicago over the last five years we found:

• 44% went to companies founded by people of color – the second highest percentage of any city in this report.
• 14.9% went to companies founded by women in the last five years – the third lowest percentage of any city in this report.
• 27.6% went to companies founded by Latine founders in the last five years–the highest percentage of any city in this report.
• 14.1% went to companies founded by AAPI founders in the last five years–the third highest percentage of any city in this report.
• Just 2.4% went to companies founded by Black founders in the last five years–the fifth highest percentage of any city in this report.

“The report has sparked important dialogues, emphasizing the urgency of creating an ecosystem that empowers historically underrepresented founders,” said Robin Ficke, Senior Vice President,The Research Center at World Business Chicago. “The positive reception underscores the collective commitment to driving change and building a more inclusive future for Chicago’s tech industry.”

Under the guise of, “you can’t improve what you don’t measure,” we know that improving the equity of venture capital distribution across race, ethnicity and gender is a long game.

“What many people have focused on is the fact that although we have pretty good levels of representation across most demographic groups—usually coming in first or second relative to other cities included in the report—funding levels are a very different story, which underscores that much more work needs to be done to get more VC dollars in the hands of historically overlooked founders in Chicago and in most other cities,” said Joey Mak , CEO at Chicago:Blend.

In advance of the report publication, Robin and Joey sat down for a behind-the-scenes conversation. Watch the full interview on YouTube.

Key takeaways:

1. Diversify the investor class: Enhancing diversity among check-writers will result in more underrepresented founders raising venture capital, improving their prospects of long-term success in the marketplace.This involves getting more women and people of color to start angel investing, a few examples include VITALIZE Venture Capital, The Josephine Collective, and Lofty Ventures.

1. More non-dilutive funding for early-stage founders: Early-stage support includes getting ready for funding. Initiatives like TechRise Chicago by P33 Chicago have successfully provided support to underrepresented founders, enabling them to obtain the necessary capital for growth and VC funding preparation. Individuals can also make tax-deductible contributions to increase the availability of non-dilutive funding for early stage entrepreneurs.

1. Expand your networks: VCs should develop relationships with innovators outside their traditional existing networks. You know more when you know more. Take a proactive approach and connect with underrepresented founders is good for VCs and the startup ecosystem. Thankfully, in Chicago alone there are a number of incubator and founder communities to tap into like 1871, mHUB , MxD, MATTER, and within our region’s academic and research communities.

World Business Chicago is proud to have collaborated with Chicago:Blend because they are in the trenches and have a real-time view of progress and long game. Similarly, Chicago:Blend gained in accessing our strong  research capabilities and team. “This creative approach to data storytelling is essential to us building a greater understanding of how opportunities to launch companies and raise funding need to be equitably across the ecosystem,” Joey Mak added.