For the first time, the majority of employees at first-time VC funds in Chicago — 50.75% — are women.
That's according to the 2022 VC diversity report released by Chicago:Blend on Wednesday that shows that when it comes to female representation, the newer funds are the ones leading the charge.
"What that's telling us is that more people are launching their own funds in a way that is different, in a way that is more inclusive, that is bringing more underrepresented folks off the sidelines," Chicago:Blend CEO Joey Mak told Chicago Inno.
With the overall share of women in Chicago's VC workforce at 35% — an increase of 2.6% year-over-year but still much lower than the nation as a whole, where 47% of the total VC workforce identifies as women — it may be time for veterans in the space to take a page from their younger counterparts when it comes to hiring.
"The firms that are demonstrating greater gender and racial diversity — those are the firms that are going to be the most successful, those are the ones that people are going to want to work for," Mak said.
The report collected data from 884 employees across 116 firms in the Chicago area that have made at least one venture investment within the past two years.
Still, not everyone is sold on the strategy.
Venture capital firms across the country have faced a difficult year, highlighted by Silicon Valley Bank's collapse and a noted fundraising slowdown seen nationwide, leaving some to wonder whether promoting diversity should still be a top priority.
In fact, a Wall Street Journal op-ed released days after Silicon Valley collapse said the company "may have been distracted by diversity demands" as one reason for its failure.
Others in the local and national VC space aren't convinced.
"I've heard that in the news, but I haven't heard that from anybody involved in IVCA," said Christine Pruyn, executive director of the Illinois Venture Capital Association, during a webinar on Wednesday. "We're pushing for more data ... that's what impactful."
In an open letter sent to the Wall Street Journal days after the Silicon Valley Bank op-ed ran, Black Women in Venture Capital, BLCK VC, among other national organizations, pushed back on the "distraction claim."
They pointed to a McKinsey & Co. report that showed that companies in the bottom quartile for gender, ethnicity and race are statistically less likely to achieve above-average financial returns than average companies in the data set.
Overall, Chicago:Blend's 2022 VC Diversity report shows that Chicago's VC space has made some gains when it comes to comes to women, Black and Asian representation, but still has a ways to go in some areas.
"Something that we thought was really encouraging, though, is that we noticed that the share of women in executive-level positions increased over that period from 20.7% to 24.8%. That's a nearly 20% year over year increase," Mak said.
