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Examining & Positioning the Path Forward for Black, Hispanic or Latino & Women Founded Companies in Chicago

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CHICAGO /PRNewswire/ World Business Chicago, the city’s public-private economic development agency, in partnership with Chicago:Blend and Fifth Star Funds, published an original report detailing the status of startups founded by underrepresented (Black, Hispanic or Latino, and women) founders; as well, the strengths, weaknesses and opportunities for Chicago-based startups ready for funding and growth.

Publication link: Chicago Business Bulletin, Issue #5: Black, Latino & Women Founded Startups in Chicago, August 22, 2022

“This report is intended to raise awareness of the strategic movement underway in Chicago to drive greater, more equitable investment by and among VCs and our city’s incredibly innovative diverse founders,” said Michael Fassnacht, President & CEO, World Business Chicago, Chief Marketing Officer, City of Chicago. “While we have seen some progress over the last couple of years, we still have a long way to go. We especially thank Chicago:Blend and Fifth Star Funds for leading the way generally, and partnering with us on the release of this report.”

The World Business Chicago Research Center developed a methodology to analyze deal data for underrepresented founders, using Crunchbase and Pitchbook™ data to explore the performance and range of funding deployed to underrepresented founders. This report establishes a baseline for Black, Hispanic or Latino, and women founded companies, and highlights that better data collection for other marginalized populations (e.g., LGBTQ+, veteran, disabled, and other ethnic or racial groups) remains an opportunity for improvement.

In sum, underrepresented founders historically account for a smaller slice of venture capital (VC) and private equity throughout the United States. In Chicago, only 10.2 percent of all deployed VC funding since 2019 has gone to Black, Hispanic or Latino, or women founded companies.

However, Chicago leads other major startup ecosystems in the share of venture capital funding garnered by underrepresented founders. Leading the report is the fact that underrepresented founders saw a 159 percent increase in VC raised between 2019 ($232M) and 2021 ($601M); and, to date in 2022, $575 million has been raised. According to World Business Chicago, this suggests a trend, or movement, afoot among Chicago investors who are increasingly participating in deals with underrepresented founders. Among the report’s highlights include:

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  1. Compared to other top startup ecosystems, Chicago has a higher share of startups participating in venture capital deals with a Black or Latino founder. 
    1. Since 2019, 5.1% of companies participating in a venture capital deal had a Black or Latino founder, compared to 2.5% nationally. 
    2. Since 2019, startups with a Hispanic or Latino founder have captured 3.1% of venture capital, more than that which was seen in the Bay Area or New York, falling only behind Miami.
    3. Since 2019, Black founded companies raised 1.5% of venture capital, although 3.1% of companies participating in a venture capital deal had a Black founder. Chicago has more Black-founded companies participating in venture capital deals than in New York or the Bay Area, falling only behind Atlanta.
  2. Chicago’s Black-founded startups now have a larger median deal size than all companies raising venture capital. For example, in 2022, the median venture capital deal size for Black founded startups was $4.3M, compared to $1.6M for all deals in Chicago.
  3. Performance by Latino startups in Chicago is driven by larger, later stage deals. Consider, in Q1 and Q2 of 2022, six Latino- founded startups raised over $290M in venture capital, or 11.8% of all venture capital raised this year. This over-performance is driven by two specific deals: a $200M Series D round closed by Loadsmart, and an $82M Series D round closed by Kin Insurance.
  4. Women-founded startups are still raising less venture capital than non-women founded startups.
    1. Despite only raising 5.7% of total venture capital since 2019, 23% of all startups participating in deals had a woman founder. 
    2. The median venture capital deal size for women-founded companies in 2022 was $0.98M, compared to $1.55M for all companies.

“We commend the World Business Chicago team for their leadership in publishing this report, which provides a comprehensive, data-driven framework for understanding the magnitude of funding disparities among BIPOC and women founders,” said Joey Mak, Executive Director, Chicago:Blend. “The report also reinforces what many of us have observed anecdotally–that some progress has been made, but there is much work left to do to build a more equitable tech and startup ecosystem for our city.”

Investors in Chicago are increasingly participating in venture capital deals with Black, Hispanic or Latino, or women founders; with nearly one-third doing so year to date in 2022. Entrepreneurs from these underrepresented groups are also launching their own funds that have equity-focused investment theses.

We sought to dive into the data on Black, Hispanic or Latino, and women founders in Chicago in order to set a baseline by which we will track and report growth, as a way to support the broader effort to drive equitable and inclusive economic development in our city,” said Hannah Loftus, Research Director, World Business Chicago. “Working alongside our Venture & Innovation team, we hope to make it easier than ever to connect startups with investors with a track record of investing in diverse companies, and begin to close the funding gap.”

Chicago is a leader in funding captured by underrepresented founders, and has well over 30 initiatives — including accelerators, incubators and training programs — to help move more startups led by diverse founders into the venture capital funding pipeline. However, there remains plenty of opportunity in tracking data trends and supporting actions for change. World Business Chicago will continue to study how best to track and learn how other leading cities are supporting diverse founders in order to drive growth.

About World Business Chicago

World Business Chicago serves a critical role in driving inclusive and equitable recovery throughout the city’s 77 neighborhoods, focused on high growth sectors: transportation, distribution, & logistics; manufacturing; healthcare & life sciences, and our local innovation, startup, & venture ecosystem. As the City of Chicago’s economic development agency, World Business Chicago leads corporate attraction & retention, workforce & talent, community impact, and promotion of Chicago as a leading global city. Supported by a council of 300+ local leaders, World Business Chicago’s portfolio of Innovation & Venture programs include: the Chicago Venture Summit series, Startup Chicago, ThinkChicago, and Venture Engine with the Illinois Science and Technology Coalition (ISTC). Follow World Business Chicago on LinkedIn for daily news and announcements on company relocation and expansion; industry and ecosystem growth, U.S. and world rankings, and more about Chicago’s economic progress.

SOURCE World Business Chicago

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Rod is a blogger, writer, filmmaker, photographer, daydreamer who likes to cook. Rod produces and directs the web series, CUPIC: Diary of an Investigator. He is also the editor, producer and administrator of TNC Network.

Business and Finance

Black-Owned Businesses Fuel Economic Impact with Growth and Optimism

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Funding Remains a Top Challenge 

WASHINGTON /PRNewswire/ — Black entrepreneurship is on the rise, benefitting both local communities and the U.S. economy, according to SCORE, a resource partner of the U.S. Small Business Administration. This Black History Month, SCORE is celebrating America’s more than two million Black-owned small businesses and offering support and resources to Black entrepreneurs who want to launch or grow a business.

Black-Owned Businesses
Lenora Ebule, founder of Black- and woman-owned business Bailan Spice, successfully funded and scaled her startup with support from her SCORE mentor.

“As new small business applications continue at a record-setting pace, Black business owners are thriving, but face unique challenges no matter what their business stage. SCORE is here to provide the tools to meet and overcome these challenges on the road to success,” said SCORE CEO Bridget Weston.

In a recent SCORE data report, Black business owners reported a 23% uptick in annual revenue growth – twice as fast as overall U.S. employer-businesses. Black-owned small businesses also added employees at double the rate of all other U.S. businesses. Despite these gains, Black entrepreneurs struggle to find funding, citing difficulty securing loans or a lack of trusted banking relationships.

A free, virtual SCORE webinar, “How To Find Funding Opportunities For Black-Owned Businesses,” on Feb. 7 will discuss financial opportunities available to the Black community. Click here to register or learn more. “The key is to learn what the different options are, where to find them and most importantly, how to qualify,” explains presenter Phyllis Johnson of PKJ Consulting. 

In addition to offering small business workshops and training, SCORE’s nationwide network of expert business mentors can provide Black business owners with critical guidance and connections, customized to the needs of each entrepreneur. Mentoring can take place in-person, virtually or via email and is always free of charge.

“Without my mentor and SCORE, I would not have been able to get the funding I needed to grow,” says Lenora Ebule, SCORE Memphis client and founder of Bailan Spice. “I started with one store with one product and I have gone to an entire range of nine products in more than 30 stores, including Kroger. Working with SCORE has helped me tremendously and I believe it would help any business.”

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Visit SCORE for Black Entrepreneurs to learn more.

About SCORE:
Since its launch nearly 60 years ago, SCORE has helped more than 11 million entrepreneurs start or grow a business. SCORE’s 10,000 volunteers provide free mentoring, workshops and educational services nationwide. Visit SCORE at www.score.org. Follow @SCOREMentors on Facebook, Twitter and LinkedIn. 

Funded [in part] through a Cooperative Agreement with the U.S. Small Business Administration. 

SOURCE SCORE

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Business and Finance

FACE teams up with TD to launch the “Propelling Black Entrepreneurship Program” with 50 grants to support Black entrepreneurs

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he program will support Black business owners in the creation of critical business and financial documents to help improve access to financing

MONTREAL /CNW Telbec/ – The Federation of African Canadian Economics (FACE), a nonprofit organization offering the first-of-its-kind Black Entrepreneurship Loan Fund has collaborated with TD Bank Group (TD) to deliver its new “Propelling Black Entrepreneurship Program” and offer 50 grants ranging from $2,500 to $5,000 to Black entrepreneurs across Canada. This program has been developed to support Black entrepreneurs in the creation of their business and financial documents, including business plans, financial statements, and tax filings to help improve access to financing

Participants in the program will receive training, tools, best practices, and mentorship opportunities related to managing and presenting financial documents and have access to FACE’s regional partners and corporate service providers, spanning leading financial and consulting firms. Business owners will also have the opportunity to partake in quarterly virtual and/or in-person sessions focused on preparing a strong business case for financing from lenders. The program has been designed to help Black business owners through the different stages of their entrepreneurial journey, so they can successfully access capital and scale their businesses.

FACE teams up with TD to provide 50 grants to support Black entrepreneurs

“There are many challenges for entrepreneurs as they pursue their business ventures, including navigating financial processes and paperwork. These challenges are accentuated for Black entrepreneurs who often also face bias in the financial system,” says Tiffany Callender, Chief Executive Officer of FACE. This program addresses some of these barriers by providing them with tools and advice so they can best manage and present their documents. Our sponsorship by TD helps support these applicants to be able to submit financially strong applications, thereby significantly increasing their chances of securing funding. Moreover, this program is open to all Black business owners interested in applying for loans, even if they have not worked with FACE before.”

“We are extremely proud to support “Propelling Black Entrepreneurship” through the TD Ready Commitment, the Bank’s corporate citizenship platform,” said Alicia Rose, Associate Vice President, Social Impact – Canada, TD Bank Group. “We know the value that entrepreneurs bring to our communities and to our local economies. Through these 50 grants, our aim is to help remove the barriers and potential bias that limit Black entrepreneurs from accessing financing to help fund their ambitions.” 

Since its inauguration in 2021, FACE has raised $160 million in capital, including $130 million from Business Development Bank of Canada (BDC), and disbursed $21.7 million, cementing itself as a catalyst for Black generational wealth creation and empowering Black Canadian entrepreneurs.

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The Propelling Black Entrepreneurship program will launch in April 2023, the details for participating in this program will be available on FACE’s website at https://facecoalition.com/

About FACE

The Federation of African Canadian Economics is a coalition of Black-led organizations dedicated to stimulating economic growth and creating generational wealth for Canadians of African Descent. In 2021 FACE was launched to address the needs of Black business owners and entrepreneurs who were economically devastated during the pandemic.

SOURCE The Federation of African Canadian Economics

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The Media Trust Warns of Increased Digital Attacks Targeting Children and Elderly

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2023 outlook reveals growing assault on consumer expectations of digital trust and safety

MCLEAN, Va. (Newswire.com) – The Media Trust, the preeminent leader in digital trust and safety for websites and mobile apps, released a report detailing the harms experienced by consumers through their everyday use of websites and mobile apps. When accessing common online environments — news, entertainment, shopping, travel — children and the elderly were increasingly affected by malware, a 3.7X and 11X growth, respectively, throughout 2022. 

The report CYA 2023: 7 Digital Safety Trends for Uncertain Times highlights malware and ad-quality challenges facing brands, publishers, and platforms as they navigate consumer-loyalty concerns and the economic uncertainties of 2023. From poor security to inappropriate content, the consumer experience is under attack, which threatens monetization channels including commerce and online advertising. 

The report confirms:

  • 4,500+ active attacks targeting millions of consumers each month 
  • 1.3 billion malicious ads blocked on Fortune 1000 websites and apps
  • 2.2X growth in e-skimming attacks since 2020
  • 3X increase in just three months of an attack leveraging a particular corrupted JavaScript library
  • 16X rise in backdoors being installed on devices — personal, corporate, government

“Threat actors have greatly improved their ability to get their malicious wares in front of the most vulnerable consumers online,” explained Chris Olson, CEO of The Media Trust. “Every business with a digital channel — website, app, gaming console — needs to be aware of how these assets are used to target and harm your customers. You cannot simply look the other way and leave children and the elderly to fend for themselves. Your family, friends, and neighbors are all being hunted every time they use the internet.”

An informative, 30-minute webinar is scheduled for Tuesday, Jan. 31, 2023. Register for  CYA 2023: 7 Digital Safety Trends Webinar

About The Media Trust: 

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Today’s digital ecosystem relies on The Media Trust to safeguard the consumer experience. We fix the issues that harm your customers, drive data breaches, violate regulations, impede revenue, and tarnish your brand. Acting as your audience, our unique digital safety platform captures their true user experience and stops harmful activity so you can better monetize and govern your digital assets. Since 2005, hundreds of digital businesses have depended on The Media Trust to protect their strategic digital revenue channels. Why not yours? The Media Trust — your partner in digital trust and safety. Learn more at www.mediatrust.com.

Source: The Media Trust

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