Venture capitalists supporting LGBTQ+ founders to drive economic growth
- Venture capitalists are increasingly backing LGBTQ+ founders to help them scale their businesses and create jobs.
- LGBTQ-owned businesses are making a substantial contribution to the American economy, diversifying communities, and offering resources for aspiring entrepreneurs.
- It is essential to find financial institutions that genuinely understand the needs of LGBTQ+ individuals for financial guidance.
In a recent report by LGBTQ+ entrepreneurship nonprofit StartOut, it was revealed that only 0.5% of the $2.1 trillion in startup funding between 2020 and 2022 was raised by LGBTQ+ founders, despite the community representing 7.2% of the U.S. population. The report highlighted that a significant portion of funding, 85%, is concentrated in just five metro areas: San Francisco, New York, Los Angeles, Denver, and Austin, Texas. StartOut emphasized the impact of anti-LGBTQ+ policies on economic opportunities, suggesting that changes in legislation could attract more founders and increase funding. The report also showcased the resilience and innovation of LGBTQ+ founders, noting that despite operating on 16% less funding compared to the industry average, they created 36% more jobs, 114% more patents, and 44% more exits from 2000 to 2022. StartOut's representatives emphasized the importance of supporting diverse teams for better investment outcomes and highlighted the challenges faced by LGBTQ+ founders, including concerns about authenticity and discrimination while fundraising. Rhett Buttle, a key figure in the LGBTQ+ entrepreneurship space, emphasized the need for tailored financial support for queer individuals seeking to start businesses. He highlighted the importance of finding affirming advisors and safe spaces for financial planning, suggesting tools like the CFP Board's search tool to locate certified financial planners specializing in working with LGBTQ+ individuals and couples. Buttle stressed the significance of thorough research into institutions and individuals to ensure genuine support beyond superficial gestures like participation in Pride events. Overall, the report and insights from LGBTQ+ entrepreneurship advocates underscore the disparities in funding and opportunities for LGBTQ+ founders, as well as the importance of creating inclusive and supportive environments for financial planning and entrepreneurship within the community. Efforts to address systemic barriers, promote diversity in investment, and provide tailored financial support are crucial steps towards fostering a more equitable and inclusive entrepreneurial landscape for LGBTQ+ individuals.