Questions for Joey Mak, Executive Director, Chicago:Blend
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Solving the “Pipeline Problem” and Creating Space for Underrepresented Investors
Chicago:Blend is a non-profit ecosystem support organization founded by a group of venture capitalists. Its purpose is to bridge equity gaps for underrepresented funders and founders and ensure that diversity, equity, and inclusion remain integral parts of Chicago’s VC industry. We had the chance to talk with Executive Director Joey Mak about why representation is essential to societal and economic progress, and how venture capitalists can help keep equitable access at the top of policymakers’ minds.
Tell us about your background. What is the work you are doing at Chicago:Blend?
Chicago:Blend was born out of a group of venture capitalists who came together out of concern for a severe lack of representation within the VC ecosystem here in Chicago. But as many of us know well, this is an industry-wide problem, not tied to any specific geography. There are three areas of work that we focus on: one is around data—gathering and publishing data measuring the demographic blend of Chicago's venture capital industry and venture-backed startups in the region. Our second area of focus is capacity building, things like providing diversity, equity and inclusion (DEI) resources and education to venture capital firms and the startups that they back. And then our third area, the newest that we're still building out, is around building up the next generation of VCs through our Chicago Venture Fellows program—to get more underrepresented, aspiring investors as well as more underrepresented founders connected to the community of venture capitalists that we work with every day. I joined the organization last year.
Why does diversity and representation in the investment community matter for innovation?
Representation addresses two issues; the first being that underrepresentation is a huge societal problem. Here at Chicago:Blend, we believe that equity matters, and we have a deeply held belief that Chicago's tech and investment communities should reflect the great diversity that exists among our broader population. The second issue representation solves is an economic one—if only a small portion of our population has access and is able to contribute to our tech economy, it limits the number of people and great ideas that ultimately make our economy work. Ultimately, a lack of representation presents a likely loss in innovation and economic growth. Last year there were roughly 12 unicorns that came out of the city. That was awesome. We all want to see tech companies grow and expand, but our question is, how many more could we launch if fewer BIPOC and gender-marginalized founders in Chicago were overlooked?
Recently, we released our most current data on VC diversity. The big headline is that VC firms, at least in Chicago, are starting to get more diverse. We're seeing an uptick in the percentage of Black, Latinx, and Asian professionals that are working in VC, but we still lag behind national rates, especially when it comes to Latinx investors working in the industry. That said, we saw a huge uptick of almost 80 percent year-over-year of Latinx professionals working in Chicago's venture community, which is encouraging, but we still have a lot of work to do.
How do you think policymakers can better support or encourage diversity?
The Illinois State Treasurer's Office has an initiative called the Illinois Growth and Innovation Fund (ILGIF). This is basically the state of Illinois co-investing as a limited partner (LP) in local VC funds. Their mandate is to generate superior returns just like any other LP, but the other part of their mandate is to have a greater emphasis on DEI and push that conversation forward. The whole idea behind ILGIF is that when they generate returns and it becomes evergreen, they can continue to reinvest in startups. This is not a new concept, but I think that ILGIF has done a really good job of putting equity front and center and galvanizing support within the legislature. From a policy perspective, there are some interesting funding mechanisms that local and state governments could potentially look at; we've seen it happen here in Illinois. And the Illinois state government is not without its challenges, but this is one of those programs that the investment community here in Chicago has rallied around since it presents another creative way to get more dollars deployed to underrepresented founders. The more that happens, the more we can advance the mission.
What challenges do you or the VCs and companies you work with face that are unique to the Midwest?
We know that access to capital—especially very early access to startup capital—is really important, because oftentimes, by the time a founder gets in front of the VC, the VC is almost surely going to ask them about their traction, how much money they’ve raised, etc. If you don't have a lot of rich friends and family who can help you with that initial raise, then everything that follows is so much harder. That's certainly something that we hear a lot from founders, and we know that it disproportionately impacts women founders, non-binary founders, and founders of color. We're very encouraged by several different initiatives launched here in town that are focused on providing that first check to underrepresented founders who might not otherwise have sources of capital to get off the ground, such as Techrise, Fifth Star Funds and others. So I think access to very early capital is a huge problem. And I imagine that's the case in a lot of other Midwest tech hubs as well.
The other problem is access to talent. We're trying to hire right now, and it’s a tough market if you're an employer. There are lots of reasons for that, but when we are talking to VCs, many of whom provide post-investment recruiting support to their portfolio companies, talent is top of mind. It’s an issue that so many founders are also facing, whether it is trying to attract the right type of talent to come work for their startup and help them grow, or just keeping their people. I don't think that's unique to startups, or even Midwest companies, I think that's a problem that a lot of industries are facing right now. We’re rethinking what work means in the U.S. and what we want out of our professional lives. It’s going to be interesting to see how that process plays out as we hopefully continue to emerge from this pandemic and see what the return to normal is going to look like.
What are Chicago:Blend’s goals moving forward?
We’d like the problems and challenges that we're facing now in the venture capital world not to exist in 10 years. For example, we don’t want to be facing the same diversity issues in 2030. We'd like to make significant progress in this area, but advancing DEI is often like fighting hand-to-hand combat with one organization and VC firm at a time. Ultimately, we would like to see a tech community and a venture capital ecosystem that truly is reflective of the broader diversity we have as a city. Chicago is very big, and we are generally more demographically diverse than the nation as a whole. But if you're going off of the demographic composition of our startup community, you wouldn't think so. From an equity standpoint, we definitely want to see broader representation.
A big part of how we get to that is by building and preparing the next generation of venture capitalists and investors. That starts by recruiting underrepresented and aspiring investors who want to break into venture capital. One of the programs that we’ve recently secured some funding for is our Chicago Venture Fellows Program, meant to provide underrepresented aspiring investors an opportunity to build a real investment track record.
It's a four month cohort-style program where they'll receive a stipend, a finder’s fee for sourcing innovative Chicago startups that eventually raise venture capital funding, one on one mentorship, ongoing professional development, admission to VC University ONLINE, and the chance to learn from Chicago’s top VCs and tech leaders. During the program, the Fellows will be focused on scouting new, investment-ready opportunities and pitching them to VC firms here in town, similar to a scouting program but not tied to any single fund. We're trying to democratize access by using all the VC firms in Chicago as an investment pool while helping the participating Fellows position themselves for full-time roles in venture. That’s how we begin to change the complexion and demographic blend of our venture ecosystem.
All of the information in this profile was accurate at the date and time of publication.
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