Inside Chicago’s New Black Entrepreneurial Renaissance

In her Pulitzer Prize-winning book on the great American migration, The Warmth of Other Suns, Isabella Wilkerson tells the story of Ida Mae Gladney, who uprooted her life from Mississippi to Chicago, drawn by the idea of economic mobility and safety that the “Promised Land” had to offer. In the early 20th century, Chicago offered opportunities for paying jobs and a growing Black middle class. Though the city was segregated and brutalized by policies redlining Black neighborhoods, it offered relief from the threat of lynching. Even in the face of economic and racial barriers, Ida Mae remained optimistic and built a life for herself and her family.

My own family was drawn from their home in Kentucky and Tennessee in the 1930s to the opportunities that beckoned in Chicago and its sister city 90 miles north, Milwaukee. Though we have encountered our share of obstacles, I, like Ida Mae before me, am optimistic about what Chicago has been and will be for my fellow Black founders and pioneers. 

This migration led to Chicago serving as an incubator for important Black businesses and nationally recognized companies. Samuel Fuller, who migrated north to Chicago in 1928, founded the Fuller Products Company, which generated more than $18 million in 1950 ($180 million in today’s economy). Born in Mississippi, George Ellis Johnson’s family moved to Chicago in 1929, where he founded Johnson Products, the first Black-owned company to be listed on the American Stock Exchange.

This year I found myself retracing the steps of my great grandparents and moving from the South (this time Atlanta) to the city of Chicago, relocating my venture studio, Genius Guild, and my $10 million investment fund, the Greenhouse Fund. As a successful tech entrepreneur who is married to a Black software engineer, many of my friends were befuddled by our choice to move back to the Midwest. Atlanta has captured the Zeitgeist, the emergence of a new “Wakanda” and everyone from Microsoft to Sweetgreen is setting up shop in the city. Yet, Chicago had captured the Zeitgeist in another way, an (unfair) image of an inner city ravaged by an epidemic of gun violence.

As one friend stated, “Why the hell would you want to move there?”

As an investor, I’m always looking for value, which means I tend not to follow the current Zeitgeist, but focus on what’s next. As a Black woman, I seek community. I want my child to have access to diversity of thought and the diversity of a community that nourishes his mind. Chicago has both.

Chicago is the original Wakanda.

The city is home to some of the most seasoned Black investors in the country, many of which are Black women. Mellody Hobson got her start as an intern with John Rodgers, founder of Ariel Investments – one of the largest Black-owned money management and mutual fund companies. Today she is Co-CEO of the firm which manages assets worth over $12 billion. Then, you have a number of rising star Black women investors, like Tessa Flippin of Capitalize VC and Jessica Patton of 5th Century Partners.

John H Johnson, founder and CEO of Johnson Publishing, was the first Black person on the Forbes 400 list and the publisher of iconic Ebony and Jet magazines, which restructured the image of wealth and success in the United States. Oprah Winfrey, one of the richest self-made women in the world, built her empire in Chicago. Barack Obama and First Lady Michelle Obama – whose house I walk by every day on my way to drop off my child at school, are now successful entrepreneurs in their own right through their media company, Higher Ground, and other endeavors.

Chicago is ranked as the top tech ecosystem in the Midwest, indicating that startup activity continues to grow as access to resources expands and the business landscape evolves into a breeding ground for new ideas and people. Unlike some other tech cities, the Windy City is livable, offering startups, incubators, accelerators, affordable housing and office options, as well as a diverse talent pool and a strong emphasis on community. Black founders, investors, and entrepreneurs continue to gravitate towards Chicago because the strong BIPOC community presence reaffirms the collective struggle and creates a sense of belonging in a startup industry that often makes them feel undervalued. 

There’s significant investment in the city: This year, Verizon launched BLK•Tech, a 12-week accelerator program devoted to building Black-led startups in the Chicago region. In June, JPMorgan Chase committed $150 million to the city over the next five years, investing in housing, jobs, and small businesses across Chicago’s South and West sides. Prism Institute, a life sciences and tech startup incubator with a focus on investing in women and BIPOC founders, is slated to be part of a $6 billion Lincoln Yards development. And Pivotal Ventures, the investment and incubation company founded by Melinda Gates, chose the city of Chicago as its first hub for it’s Gender Equity in Tech initiative, investing millions in the city to build a tech ecosystem with gender equity as its center.

Now more than ever, a community that reflects your identity, embodies your values, and uplifts your plight is critical. It’s no secret that Black entrepreneurs are still overlooked by most venture capitalists. Black startup entrepreneurs only received 1.2% of the $147 billion invested in American startups during the first half of 2021. While Chicago has seen record amounts of venture capital flow – outperforming every other major city in the U.S. the first quarter of this year, that investment disproportionately goes to non-Black founders. Numerous digital and tech ventures are finding success in Chicago where the entrepreneurial ecosystem supports economic diversity and access to top talent – forming an inclusive community that challenges the very identity of Silicon Valley. Chicago tech firms raised a record $2 billion in the first quarter of 2021 – the largest venture capital investment the city has seen in over 15 years. This influx of capital reflects a trend of growth in Chicago, marking an increase from the $2.2 billion invested in all of 2020. 

Chicago is already home to ten Black-founded startups that have raised over $1 million in funding, and many more enterprises are expanding. Though the city is still behind established investment powerhouses like New York and San Francisco – both home to over 70 Black and Brown founded startups that have raised over $1 million – Chicago has already outpaced metro areas such as Washington D.C. and Seattle in this metric. 

Chicago has proven throughout history that it is a center of innovation and renaissance, not just for Black families escaping a Jim Crow South, but for Black entrepreneurs who seek to break down barriers. I moved to Chicago this summer, as Ida Mae did 84 years ago, hopeful for the future, but recognizing the barriers that Black women pioneers face. Black founders and investors have long been overlooked and continue to overcome monumental obstacles as we break into a traditionally white, coastal sector. Just as past generations of Black entrepreneurs did, I believe in the power of investing in Black founders, scaling Black startups, and uplifting Black communities. Chicago is where generations of Black Americans before me laid the seeds for us to thrive and I am here to continue their legacy: to restructure the flow of capital into Black led startups and communities and to open the door for Black founders in the “Promised Land”.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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