Listed originally in Crains 

Women in Chicago's venture-capital industry back in 1989 didn't have much opportunity for networking, even when they traveled to Washington for the National Venture Capital Association's annual conference. After spotting the few women from other cities, they went out for dinner; the reservation was for fewer than 10, recalls industry pioneer Ellen Carnahan, who at the time was at William Blair Capital Partners in Chicago.

That gathering became a ritual that lasted nearly a decade, but the numbers didn't expand much. In the past five years, however, they have. "The pool is much bigger now," she says, pointing to her younger peer Gale Bowman at IrishAngels, who regularly assembles nearly 50 women just in Chicago.

Women are still underrepresented in venture capital, both in Chicago and nationally, with just one woman in a senior post for every four men. But a new generation of women is gaining traction working alongside men and launching their own venture firms and small funds.

As they seek to raise larger subsequent funds, women's new track record of investment returns will be scrutinized closely. "The proof is in the pudding, and the proof takes 15 to 17 years," says Maura O'Hara, the longtime executive director of the Illinois Venture Capital Association

BIG-COMPANY BACKING

Pensions, foundations, family investment offices and other institutional investors had $368 billion of value, both cash and assets, with U.S. venture-capital firms, as of the end of June, according to Seattle research firm Pitchbook. The firms, in turn, invest in startups and hope for big returns. They employed about 335 women in senior investment jobs, versus 1,239 men in those roles, such as CEO, chief investment officer and managing partner, Pitchbook says.

Chicago isn't a huge hub for venture funds, but it's the center of activity for Illinois. IVCA's in-state venture-capital members (a few are outside the state) have about $10 billion under management. Of IVCA's 34 active venture member firms, only three are mainly led by women. Pitchbook doesn't parse the data by region, and the IVCA doesn't have any headcount figures.

In Carnahan's era, some of the city's biggest companies gave women a boost in the industry. In her 20-year career at Blair, she became head of technology investing before co-founding Seyen Capital in 2006. Her industry pal Donna Williamson was a vice president at Baxter International from 1983 to 1992, with purview of emerging companies, before parlaying that experience into a managing director post at ABN Amro overseeing private-equity investments in health care.

Northbrook-based insurer Allstate hired a cadre of women as investment professionals in its venture-capital arm, including Sona Wang, who left with colleagues Len Batterson and Don Johnson to form Batterson Johnson & Wang in 1987, where they invested in high-tech startups. "They were just open to diversity, so that's probably what really drove it," Batterson says of Allstate.

Wang, a Korean immigrant and one of Chicago's accomplished women in the field, left the firm in the mid-1990s to join other partners in founding Inroads Capital Partners, which focused on investing in female and minority entrepreneurs. Later, she teamed with Williamson and another woman to found Ceres Venture Fund. While Wang is optimistic about the future, including for her daughter now interning at Chicago accelerator Techstars, she says it's hard to point to "significant progress." "Highly qualified women . . . are still finding their way," she says.

Both the annual Washington dinner that Carnahan instituted for the NVCA and a local women's committee of the IVCA she started there as chairman in 2009 died off. O'Hara says the IVCA women's group was dissolved to bolster national women's groups, such as the Women's Association of Venture and Equity, and avoid duplication of effort. "If those efforts fade, we will pick it back up," she says.

A FOCUS ON NETWORKING

Wave's Midwest chapter picked up the ball in 2013 to bring together women who invest in privately held companies, including venture investing and private-equity investing in more mature companies. Women have struggled to get a toehold in both.

Wave meets a few times a year and hosts a popular annual golf scramble event, but Bowman wanted to create a group focused on venture, so she launched Chicago Women in VC in 2016. It welcomes women who touch any aspect of venture capital, from investing to marketing. It, too, is focused on networking, with cocktail hours and other social events. "The real hope is that we'll do more investing together because we're meeting on a regular basis," says Bowman, who is managing director at IrishAngels, an organization that invests about $7 million annually, mainly in businesses with a University of Notre Dame connection.

One woman in her new directory is Jessica Droste Yagan, who, along with Tasha Seitz, has been a top partner at Chicago venture investing firm Impact Engine since 2014. Yagan says that drawing more women into the process makes for smarter investing. "Having one kind of person making investment decisions is limiting," she says.

Some companies propelling women into leadership roles appear to agree. Futures exchange operator CME Group promoted Rumi Morales to head its ventures unit in 2013, and Kim Trautmann took over the venture unit at trading company DRW Holdings in 2016. Other women on the rise include Dana Wright, who was hired as a managing director at Math Venture Partners in October, and Momei Qu, a vice president who left Baird Capital in February for Penny Pritzker's PSP Capital Partners. "There is a movement of far more women getting involved," says Nancy Sullivan, who became CEO of Illinois Ventures in 2013.

'KEEP HANGING IN THERE'

Women today are taking another stab at starting their own funds. Constance Freedman, who founded Moderne Ventures, raised that firm's first $33 million fund in 2015. She got her start at Boston fund Cue Ball Capital and eventually moved to Chicago, where she led Second Century Ventures' $20 million fund for the National Association of Realtors. Now she's on the cusp of raising another fund next year.

Chicago's profile in venture has grown significantly, but the presence of women hasn't kept pace, Freedman says. It's a "network business," and people invest in people they know, she says. Until the playing field is leveled, there will be more funding for men than for women, she adds.

Gerri Kahnweiler and Cayla Weisberg also launched their own Chicago firm, InvestHer Ventures, in 2016 to invest in startups with at least one female equity partner. Morales, who left CME Group last year, is also angling to launch a fund.

Carnahan remains an investor in nine venture-capital funds through her Machrie Enterprises. For her, funds must have female investment professionals. "The more you can source from different networks, the better the deal flow you're going to have," she says. "It takes seven to 10 years to get a track record. You have to be patient and keep hanging in there."

That's key advice for anyone investing in startups, but perhaps especially for women forging a new place in the venture arena.