Moneda Moves (167): Chicago As A National Hub for Latino and Black Entrepreneurs
Mi gente, in the last few weeks, we’ve devoted time to engagements in our hometown of Chicago. Our presence matters here: This city has diverse talent and possibilities to offer the national entrepreneurial ecosystem, with a higher share of startups led by Black, Hispanic or Latino founders participating in venture capital deals.
Not only are BIPOC entrepreneurs generating promising companies, they are creating solutions in the ecosystem. When met with low investment numbers in BIPOC-led startups, Black, Latino and women entrepreneurs are also taking matter into their own hands and launching their own funds with equity investment theses, according to Chicago’s public‑private economic development agency World Business Chicago.
For these reasons among many more, it’s important that Chicago lands on our national and global maps when talking about startups and funding.
We joined World Business Chicago a few days ago at their Latinx Showcase of Chicago startups to discuss the entrepreneurial and funding ecosystem at a national and local level alongside Samara Hernandez, Founding Partner at Chingona Ventures, moderated by Paulina Martinez, Director of Business Development.
The Latinx Showcase was an invite-only virtual event exclusive for select VCs and tech investors, but for our Moneda Moves readers, we brought back a few takeaways we shared at our fireside:
Global venture funding reached $64.6B in Q3’23 — an 11% increase from the previous quarter, driven by significant deals in areas like:
Electric vehicles
Sustainable manufacturing
AI
But venture funding reached $194B globally in 2023 so far, less than half of 2022 totals in Q3. While at a global level, early stages take most of the deal share, while Chicago most recently has seen an increase in both early and later stage investments.
On that note, Chicago is an interesting landscape to watch for Hispanic and Latino founders, as venture capital raised increases among this cohort. From 2019-2021, the share of venture capital funding being raised by Hispanic or Latino founded startups changed over 10 percentage points, an $80.5M difference. (The graphic below is from 2022 — and we’re patiently standing by for a 2023 refresh.)
Big challenges experienced top level by Latino founders, according to McKinsey include:
Less exposure to entrepreneurial, educational, and investor networks
Investor bias at play. We’ve seen this very prominently addressed in California’s recently passed law (Senate Bill 54) which will require venture capital firms to disclose the race and gender of the founders of the companies they fund.
Underrepresented founders, whose ideas, solutions, or business models don’t align with historical precedent so there is limited blueprint matching for investors. Investors need to be willing to bet on something new.
Mental health– for which representation is antidote (shout out to networks like SomosVC and La Familia on doing the work here)
Some action items based on the challenges above: hiring BIPOC professionals as investors at all levels, developing networks for entrepreneurs and investors, making DEI metrics more transparent to drive accountability.
Chingona Ventures’ Samara Hernandez shared final takeaways for entrepreneurs:
VC isn’t the only way to raise capital, explore all your options in full.
Build a business that problem-solves for your customer first and foremost.
Authenticity matters. When it comes to sharing your story, choose the medium that is best suited for you.
It was a pleasure to hear pitches from Chicago startups and connect with WBC, and it won’t be our last.
Con poder,
Lyanne
Latino and BIPOC-led business updates and companies raising capital.
Founder of Tia Lupita and Moneda Moves Guest Hector Saldivar Raises $2.6M in Seed Funding: Tia Lupita Foods is a better for you, healthy Mexican-inspired food brand that uses clean and simple ingredients in all their products. Hector’s journey started with his mom’s salsa recipe, which he wanted to package to share with the world. Tia Lupita Foods has expanded beyond salsas and is in the business of selling tortillas, grain-free chips and much more. Recently on Moneda Moves, we spoke with Hector about the origin story behind Tia Lupita, bootstrapping and funding the future of his company. Listen to the full episode here.
Action Items On Equal Pay for Latinas: To wrap up Latinx Heritage Month, we spoke about Latina Equal Pay Day at Chief, bringing attention to the prevailing to the prevailing pay gap Latinas face at varied levels in the workforce.
Our topics of discussion? The growing Latino economic power and in that the growing importance of Latinas getting paid their worth within it. Big takeaways:
💰 Pay transparency and assessments are key tools to help close the wage gap.
💰 Legislation is just as important. You can learn more about it here: https://lnkd.in/g6nBNZ8U
💰 These themes will become increasingly important as Latinas continue to step into the gig economy and entrepreneurship.
Thank you for joining us! Until next time, catch us here on Moneda Moves.