Chicago:Blend releases new data on the state of venture for underrepresented founders
It is no secret that women and people of color are underrepresented in the tech industry. In a city as demographically diverse as ours, expanding opportunities for marginalized founders to launch companies and secure growth capital is essential to creating a more equitable future for Chicago.
Since our founding in 2018, Chicago:Blend has published annual reports about the state of diversity in Chicago’s venture capital and startup ecosystem. Given the outsized role that VC funding plays in determining which products and ideas will succeed, these data collection efforts provide us with a quantifiable understanding about the extent to which women entrepreneurs and founders of color are involved in shaping our local economy.
This year, we partnered with the city’s economic development arm World Business Chicago and CDW to compile founder demographics for “new” venture-backed companies, defined as those launched between 2018 and 2023, and identified 307 Chicago startups that raised a total of $2.9 billion in VC funding. Within this sample, 112 startups (36.5%) had at least one woman founder and they collectively raised $434 million, approximately 14.9% of the total VC raised by Chicago companies founded in the last five years. We also observed that 75 new startups (24.4%) had at least one founder of color, securing $1.28 billion in venture or 44% of the total VC funding raised by new Chicago companies. These percentages give a clearer understanding about the concentration of new companies launched by underrepresented entrepreneurs and the local share of venture funding they are raising relative to other new VC-backed companies in the region.
We conducted a similar analysis for nine other U.S. metro regions with similarly-sized tech ecosystems, including Atlanta, Austin, Boston, Denver, Los Angeles, Miami, New York, San Francisco, and Seattle. This gave us comparable data for each region, allowing us to answer two key questions – which cities had a higher percentage of new VC-backed companies founded by underrepresented entrepreneurs and what share of VC did these companies raise relative to other venture-backed companies in their respective regions?
Below is a summary of our findings.
The share of venture-backed companies in Chicago founded by a diverse founder over the last five years:
36.5% had at least one woman founder – the highest percentage of any city included in this report.
24.4% had at least one founder of color -the second highest percentage of any city.
10.4% had at least one Black or African American founder--the second highest percentage of any city after only Atlanta.
8% had at least one Latine founder - the second highest percentage of any city after only Miami.
5.9% had at least one AAPI founder - the second highest percentage of any city after only San Francisco.
The share of VC funding raised by diverse founders in Chicago over the last five years:
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.