Chicago’s VC-backed companies make progress on gender, racial and ethnic representation in leadership

CHICAGO–The non-profit organization Chicago:Blend today released findings from their 2022 Startup Diversity Survey measuring gender, racial and ethnic representation among venture-backed startups in the Chicago area. 

The data (summarized below) shows that Chicago is outpacing the U.S. in terms of gender diversity on founding teams, with 39% of venture-backed companies having at least one founder identifying as Woman, Non-binary or Other Gender, compared to 28% of startups nationally. 

“We are encouraged by the findings. Chicago is making big strides on racial, ethnic and gender representation among founders and CEOs who are launching and leading venture-backed companies in the region,” said Chicago:Blend’s executive director Joey Mak. “There is still a lot of room for improvement, but this speaks to the tenacity of our region’s entrepreneurs and the supportiveness of the broader startup and tech ecosystem.”

Between 2020-22, the total share of Women, Non-binary or Other Gender CEOs (which includes founders and non-founding CEOs), jumped from 21.8% to 33.7%, a nearly 55% increase. During the same period, the total share of Black or African American CEOs and Hispanic or Latino CEOs increased sharply at a rate of 187% and 563%, respectively.

Chicago also outperforms the U.S. on gender diversity across VC-backed company boards. Since 2020, the total share of local board seats held by Women, Non-binary or Other Gender grew from 15.9% to 26.9%, a 69% increase. By comparison, the total share of board seats held by women nationally also grew during this same period, but at a slower rate (+27%), from 11% to 14%. 

Presented by CDW in collaboration with the Polsky Center for Entrepreneurship and Innovation at the University of Chicago, this is the third such survey by Chicago:Blend since the organization’s founding in 2018.

“At CDW, we are passionate about helping startups along their growth journey, which is why it was important for us to support Chicago:Blend in this effort. We know that much work remains to be done to improve gender, racial and ethnic diversity across the region’s startup community and we now have new data to better target those efforts,” said CDW’s Startup Strategist Teague Goddard.

This year’s survey was conducted from April 21 to May 19 and was supported by GET Cities, the Illinois Growth & Innovation Fund, the Illinois Science & Technology Coalition, the Illinois Venture Capital Association, P33 and World Business Chicago. The Polsky Center analyzed self-reported data on 77 companies.


2022 Survey Findings: Highlights 

Founding Teams

  • Chicago is outpacing the U.S. in terms of gender diversity on founding teams, with 39% of venture-backed companies having at least one founder identifying as Woman, Non-binary or Other Gender, compared to 28% of startups nationally.

  • The majority (72.7%) of VC-backed companies surveyed have at least one White founder; 26% have at least one Asian founder; 16.9% have at least one Hispanic or Latino founder; 14.3% have at least one Black or African American founder; and 2.6% have at least one founder identifying as Two or More Races.

CEOs

*Includes CEOs who are founders, as well as non-founding CEOs

  • From 2020-22, the total share of Women, Non-binary or Other Gender CEOs in the survey jumped from 21.8% to 33.7%, a nearly 55% increase.

  • During the same period, the share of CEOs identifying as Black or African American grew from 5.08% to 14.61% (+187%); share of Hispanic or Latino CEOs grew from 1.69% to 11.2% (+583%); share of Asian CEOs dropped from 22.03% to 17.98% (-18.41%); share of White CEOs fell from 64.41% to 52.8% (-18.41%); and share of Two or More Races CEOs fell from 6.78% to 3.37% (-50.28%).

Boards of Directors

  • Chicago also outperforms the U.S. on gender diversity across VC-backed company boards. Between 2020-22, the total share of local board seats held by Women, Non-binary or Other Gender grew from 15.9% to 26.9% (+69%). The total share of board seats held by women nationally also grew during this same period, but at a slower rate (+27%), from 11% to 14%. 

Capital Raised

  • All companies in this survey that have raised more than $50M have founding teams that are all Men.

  • No companies in this survey that report having at least one Hispanic or Latino founder have raised more than $20M. Similarly, no companies that report having at least one Black or African American founder have raised more than $50M. 

Funding Sources (In-State vs. Out-of-State)

  • On average, companies with Women, Non-BInary and Other Gender founders raised $1.9M from sources within Illinois and $3.1M from sources outside of Illinois. Companies with Men founders, on average, raised $4.3M from Illinois sources and $4.9M from out-of-state sources.

  • Founders across all race categories reported raising more funding (on average) from sources outside of Illinois, and companies with White founders raised the most overall from both in-state and out-of-state sources. 

    • When comparing capital raised (on average) from in-state versus out-of-state sources, companies with Hispanic or Latino founders raised $943K in-state / $2.2M out-of-state; Black or African American founders raised $919K in-state / $2.6M out-of-state; Asian founders $831K in-state / $1.7M out-of-state; White founders $4.6M in-state / $6M out-of-state.

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Chicago:Blend