Jan 19, 2022 - Business

Chicago VCs get more diverse, but still behind nationally

Ready on graphic! Data: Chicago:Blend; Chart: Will Chase/Axios

Chicago's tech industry saw a record year for fundraising, but a new study says it lags behind other cities when it comes to diversity.

Why it matters: According to the annual VC Diversity Survey from Chicago:Blend, 2021 did see growth in both minorities and women working in venture capital, but Chicago is still behind national averages.

What they're saying: "Although we are pleased that the share of underrepresented professionals working in Chicago's venture industry increased last year, we know that much more needs to be done to bring greater equity to this sector," says Joey Mak, executive director of Chicago:Blend. "Especially given that Chicago is demographically more diverse than the nation as a whole."

Survey takeaways: Latino professionals saw the biggest spike from 2020 to 2021, with an 80% increase in the VC workforce. They now represent 4.3% of Chicago's total VC employees, lower than the national average of 7%.

  • Black professionals increased over 12% and now make up 6% of the Chicago VC workforce, outpacing the national average of 4%.
  • Asian professionals were up 10% year over year but now represent just over 10% of the workforce, much lower than the national rate of 18%.
  • Women in venture capital saw a slight increase in 2021, but the 34% figure in Chicago is well behind the national rate of 45%.

Big picture: Funds are being set up in Chicago to address the issue of raising money for founders of color.

  • "We launched Fifth Star Funds specifically to address the lack of capital being invested in early stage Black tech founders in Chicago," Samir Mirza, co-founder of the VC fund, tells Axios. "We seek to bridge the funding gap by using a robust, objective process of evaluating founders so we can remove the racial biases that have existed in the venture landscape."

What's next: Chicago:Blend is hosting a webinar and panel discussion at 9am today.

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