How Chicago Became the Top Ecosystem in the World for Women-Led Startups
Chicago is home to nine Fortune 1000 financial services companies, the Chicago Stock Exchange, and the second-largest central business district in the United States. It’s also home to the Chicago Bulls, with whom Michael Jordan won six titles, becoming one of the NBA's all-time greats. But while it is widely known for its business and sports history, it is also positioned amongst the world’s top 20 startup ecosystems, standing strong at #17 in the world.
Out of many outstanding reasons to know Chicago, Startup Genome’s research has identified one to be celebrated worldwide: it is the number one startup ecosystem for female founders and has the largest percentage of women-founded startups in the world. Chicago’s startups consist of 25% female founders, which is remarkable compared to the global average of 14.1%.
One notable female-founded startup is Kaizen Health, a company that Built In Chicago lists as one to watch. Kaizen Health is helping to bridge the gap of healthcare services and transportation by providing non-emergency patients with transportation options in partnership with Lyft and Medical Transportation Management. Kaizen Health raised $3.8 million in 2018.
While it doesn’t take much to acknowledge the relevance of female founders in Chicago, compared to the whole world, the conversation we’d like to spark is: why is it so?
A Groundswell of Women Supporting Women
What makes Chicago’s ecosystem so special? For one, there are dozens of programs, businesses, and organizations working towards helping women entrepreneurs succeed in the city.
One such organization is Ms. Tech, a membership organization that brings together women in tech and innovative companies to help each other with connections, mentorship, and knowledge. Its mission is to “help business women do tech and tech women do business.”
“In my past ten years in Chicago, there has been a groundswell of women entrepreneurs gathering to support each other virtually and in person,” Nicole Yeary, founder and CEO of Ms.Tech, said. “There were the traditional online sources like the SBA and SCORE, but we were all seeking more.”
Yeary played a leading role at WiSTEM (Women in Science, Technology, Engineering and Math), a program Ms. Tech created for 1871 — one of Startup Genome’s partners. WiSTEM is fueled by the idea that “Chicago is the best place in the country for women entrepreneurs to start a business.” Designed around the challenges and opportunities faced by women entrepreneurs, the 12-week, curriculum-based program connects women to capital, community, and technology resources.
“We create experiences that inspire and accelerate both online and offline conversations, improving the representation and ultimately the success of women in business and technology,” Yeary said. “Strengthening our foundation, we continue to gain important feedback and critical insights so we can continue to develop the best-in-class programs designed specifically for women and package that up for organizations.”
Another notable organization is FemCity, a membership-based foundation that creates local business workshops throughout the U.S., including Chicago. Members are able to connect locally or virtually and join social events each month.
Creating Better Access To Funding
Chicago-based InvestHer is an early stage investment firm that focuses on partnering and investing in female entrepreneurs. It was founded by Gerri Kahnweiler and Cayla Weisberg with an aim to find more startup funding for startups led by women.
Kahnweiler and Weisberg have said they are motivated by the high number of female founders in Chicago, along with the fact that less than 3% of venture funding goes to women-led startups, while these are more likely to have higher valuation.
On the similar mission is DyMynd Angels, an angel network and fund set out to close the gender gap by “connecting future female funders and founders.” As reported on their website, “female founders in Chicago and throughout the Midwest receive just $2.90 out of every $100 that is invested in her male counterparts.”
For them, one of the biggest ways to increase the number of female-founded startups is to increase the number of women investors, who are still the minority in the U.S.
Growing Impact: The Ripple Effect
As if supporting female founders with access to capital, networks, and knowledge wasn’t enough, the Chicago community has created pathways for consumers to directly help out female founders. Bossy Chicago, started by Sam Letscher, is an online directory that connects customers with women-owned businesses. Their aim is to drive revenue to women entrepreneurs by shifting consumer habits to purchase from the companies in their directory.
These organizations and communities have a common goal: to raise the representativeness of female-led startups by helping to land funding and press, thus creating leaders that serve as role models for future generations. The impact of these organizations is implanting the idea that starting a business isn’t just a possibility, but it’s also a natural path for any woman.
“The peer-to-peer learning that took place over Ms.Tech Mastermind lunches and through storytelling in evening events like Ms.Tech Talks were foundations that activated leaders in the community and facilitated networking opportunities, constantly elevating new and existing profiles of women to emulate,” Yeary said.
These initiatives and organizations are set to have a long-term impact. Its ripple effect will likely reverberate for future generations, as female-led startups develop more women with startup experience who will go on to found, mentor, or fund new female-led ventures.
With all of these powerful catalysts driving funding, innovation, resources, and revenue toward women-owned startups in Chicago, is it any wonder that the city is the number one ecosystem for female founders?
Are you from Chicago and working to improve the entrepreneurial journey for women? We’d like to hear from you! Please email us at [email protected] and let’s talk.