Chicago is the World Capital of Female-Founded Startups (Moxie Jean)
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Hint: It’s not San Francisco
Move over Silicon Valley. Chicago has the largest percentage of female-founded startups in the world.
Roughly one out of every three (30%) Windy City tech startups was launched by a female founder, according to the 2015 Global Startup Ecosystem Ranking by Compass.co, a provider of reporting and benchmarking software. That handily beats the global average of 20%. Boston is a close second at 29%, followed by San Francisco (24%) and Los Angeles (22%). Internationally, Montreal (22%) and Paris (21%) took the top slots, with Tel Aviv taking third place (20%).
The Compass.co report is based on interviews with 200 entrepreneurs in 25 countries, 11,000 startup surveys completed in the past five months and content from partners like Deloitte and CrunchBase.
So, why are more women founding tech companies in these cities than in, say, Seattle or Berlin, where women launch just 9% of startups? There’s no single answer, but when you look closely at the places that topped the ranking a few common traits begin to emerge.
Chicago
Take top-scoring Chicago. According to Compass.com, women make up about 30% of the Chicago’s startup workforce—among the highest percentage of all the cities included in the study. That’s had an impact on the local startup culture and provides would-be female entrepreneurs with the necessary experience to launch their own ventures. “It’s not as much of a bro culture when it comes to technology-minded companies,” says Nicole Yeary, founder of Ms. Tech, a community for female entrepreneurs in the city.
There’s also evidence that female-founded Chicago companies are succeeding, assuming you count being acquired as a success. Here’s just a few startups that were recently snapped up: In June, Groupon acquired Pretty Quick, an online marketplace for salon and spa appointments led by Coco Meers. Deliv acquired WeDeliver, which was co-founded by Daniela Bolzmann, in the same month. And Moxie Jean, a website for reselling kids’clothes, was just bought by San Francisco-based Schoola.
Boston
Eveline Buchatsky, director of Techstars Boston, credits some of the Massachusetts city’s success to a pipeline that begins with Harvard and MIT. Nearly half of MIT undergrads are women, while 41% of Harvard Business School’s class of 2016 is female. “These feed the rest of the chain with good raw material that includes a lot of women,” says Buchatsky.
Boston also has a number of prominent female investors. There’s Maia Heymann, senior managing director at CommonAngels, Nicole Stata, founder of Boston Seed and Project 11 Ventures’ Katie Rae—to name just a few. Jean Hammond, an early investor in Zipcar, is a principal at JPH Associates. “Jean is likely the most active angel investor in the region,” says Buchatsky.
Los Angeles
While its Bay Area neighbor to the north scored slightly higher in the report, Los Angeles made an impressive showing. One of L.A.’s hottest startups is Tracy DiNunzio’s Tradesy, an online consignment shop that has raised $44.5 million, most notably from Kleiner Perkins Caufield & Byers. DiNunzio notes that male dominance was already entrenched in Silicon Valley by the time L.A.’s startup community really got rolling. “In L.A., we had a haphazard start, with money pouring in from all different industries and that went to a much more diverse base of founders,” says DiNunzio. “It took us longer to find our way, but, when we did, therewas much more diversity across the board.”
The people launching L.A.’s startups—like Jessica Alba with The Honest Company—don’t necessarily come from a technical background. That contributes to a diversity of founders, since programmers still skew male. “We don’t have the same culture that says everyone is trying to be Mark Zuckberberg,” says DiNunzio.
Paris
Some credit some of the success of Parisian female founders to the city’s strong fashion industry, which has been making the transition online. “France has a lot of e-commerce, so we naturally have a lot of women in those spaces,” says Roxanne Varza, a Silicon Valley transplant who evaluates startups for Microsoft Ventures in Paris and co-founded Tech.eu, a tech coverage sit. “Investors in France have generally preferred to fund a profitable startup, so there is a focus on e-commerce,” she says.
Women are also well represented in French government and VC firms. Axelle Lemaire is the current French Digital Minister (she was preceded by Fleur Pelerin). Between them, Elaia Partners, 360 Capital Partners, Ventech, Daphni and Iris Capital manage more than $1.3 billion—and all have female partners.
“Right now in Europe it’s just becoming hot to become a startup founder,” says Varza. “Everyone wants to start a company.”