City has tripled the share of seed and angel dollars flowing to underrepresented founders
For those of us who pertaining to the venture capital industry, two stories are ubiquitous: there is the story of how much capital has been invested lately; you’ve seen the data – 2020 and 2021 set almost every record around the world for private market investment.
The other story that crops up time and again is that of low or negative progress among venture capitalists investing in more diverse founders. The ubiquitous nature of the latter story makes it all the more infuriating to report on. The data neatly shows this massive problem; why haven’t things changed?
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But there is some reason for cautious optimism. The Exchange has recently been collecting data on the venture capital scene in the Midwest, with a special focus on the Chicago area. Thanks to data from M25, a venture capital firm with a geographic focus in the Midwest, Crunchbase data collected by Chicago-based P33, and interviews with a number of local investors and founders, the story emerges that it’s possible to change the ratio if it comes down to investing.
Simple? Not possible? Yes. And worth doing? Certainly.
To better understand what’s going on in Chicago and the greater Midwest, we spoke with Desiree Vargas Wrigleythe executive director of TechRise, a P33 project; Stella Ashaolu, the founder and CEO of WeSolv and the co-founder of Fifth Star Funds; and Kristen Sundayco-founder at Paladin and partner at LongJump.
Let’s start with M25 data on how they find it possible to invest in more diverse founders in their area, then narrow our lens to how the numbers shift in Chicago. Then we bring notes from active players working to make the industry change.
State of the Chicago (Midwest) union
M25 invests in the Midwest, but is based in Chicago. The company recently released an update to its regular series of diversity reports, which piqued our curiosity. Why? Because the company not only reports investments, it also provides insight into how those investments came about.