Can Female Entrepreneurs Take Chicago Seriously?
The Chicago startup scene is growing and has been over the past few years. In 2013, a Forbes article highlighted how Chicago’s startup scene was “on fire”. Interestingly, out of the 24 startups that were creating all of this fire, only two of them had a female co-founder. Although, let’s not get ahead of ourselves here. What about early stage startups?
A recent study conducted by Nicole Yeary at Ms.Tech and MatterMark presents pretty damning evidence against how little effort is going into the initial funding of female founded startups in Chicago. The study analyzed 45 different startups that had received pre-series A funding between January-August 2014 for startups in New York City versus Chicago. Total funds raised in New York were $37,398,122. Total funds raised in Chicago were $8,849,780. Out of the total raised, 41% went to teams with one or more female founders in New York whereas only 22% did in Chicago. When you break down the actual money raised in each respective city, female founded teams were able to raise $10,429,577 in New York. Female founded teams were only able to raise $15,000 in Chicago. Is it just me or is something clearly wrong with this picture?
Why is it important for Chicago to start making more of an effort in investing in female founded startups?
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Innovation Isn’t Limited to Gender.
We seriously need to kill “pattern recognition” when it comes to entrepreneurship. Yes, there are more male funded startups, especially in the tech space, and unfortunately many investors focus on the backgrounds of these particular individuals to determine what the success will be of other companies. However, there’s an enormous list of female founded startups with diverse backgrounds that are killing it in the game right now. Some of my personal favorites – NastyGal, Rent-the-Runway, Eventbrite, and too many others too count – have not only raised serious funds (outside of Chicago) but have shown serious growth that are making for some seriously happy investors.
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Higher ROI’s & Capital Efficient Companies.
It’s astounding that women are starting companies at 1.5 times higher than the national rate. In addition, according to new research, women led companies show a 35% higher return on investment and are more capital efficient when they are venture backed. Organizations like Women 2.0, AOL, and 500 Women are taking strides to ensure that women founded companies with potential are recognized. It’s vital that Chicago follows suit and provides more resources in helping female entrepreneurs gain access to venture backed capital. FemTech is a start, but is it actually enough?
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There are kick-ass female-founded and co-founded startups in Chicago.
Citizen Made, Brideside, WeDeliver, Built In, PackBack, Dabble, Everpurse, and my biased favorite, ZipFit, were all built in Chicago. However, many of these companies were not VC backed in Chicago.
It’s exciting when entrepreneurship is embraced and flourishing in a city because it becomes a magnet for innovation. At ZipFit, we were lucky enough to find some awesome angel investors in Chicago that believed in a female co-founded team. Although, if Chicago wants female entrepreneurs to be taken seriously, then our companies need to be taken seriously. Until then, I guess investors in other cities will reap the 35% higher return from female founded startups from Chicago.
Glappitnova unites influencers, and talent from different industries through storytelling, performances, classes, and events for one crazy 8 day experience in Chicago. The opinions expressed here by Glappitnova.com contributors are their own, not those of Glappitnova.com.
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