Europe's startup sector has a big old diversity problem. Only 2% of funding goes to women. Less than 0.5% of funding goes to Black founders. And then when it comes to founders who identify as LGBTQ+ or disabled, nobody's even tracking the data in Europe.
“As an LGBTQ+ founder, or as a disabled founder, we have not had that focus of support,” says Joseph Williams, a founder who is LGBTQ+, autistic and physically disabled.
Ripples of change are beginning, however. Grassroots communities for queer entrepreneurs are appearing, LGBTQ+ founders are starting to get early-stage funding to build products that the market has been crying out for and more resources are popping up to help investors find more diverse founders.
Three queer entrepreneurs tell Sifted why it's about bloody time — and why the tech industry will be all the better for it.
Not all types of diversity treated equally
VCs have become increasingly conscious of diversity in the past few years — there are now whole funds, accelerators and mentoring programmes solely focused on investing in women founders and Black founders — but LGBTQ+ and disabled founders have been somewhat overlooked.
“What is far more disheartening than being turned down by a run-of-the-mill VC is when you approach 'diversity-focused' VCs that tell you disability or LGBTQ+ is not on the agenda. And I've had easily a dozen of those conversations,” says Williams, who is the cofounder of hiring platform Clu, which helps other startups create better, more inclusive hiring processes.
Williams founded the company after his own experience trying to find work. When he was applying for jobs he found the recruitment process exclusionary towards people like him — with interview rooms not always accessible to those with physical disabilities, and recruitment websites often not designed with neurodivergent applicants in mind.
But as an LGBTQ+ founder, his journey hasn’t been an easy one.
“We live in a very homophobic world at the moment. Our identities are still up for debate, as dictated by our politicians… [and] that has a trickle down effect in society,” he says.
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This homophobia comes in various forms, ranging from microaggressions and patronisation, to being asked to stay in the closet, according to Christian Tooley, founder of i³ investing, a platform and community for queer founders and investors.
“I've had people say things like, ‘there's no need to mention [your sexuality]. It may cause you issues with funding [your venture]. Why don't you get the funding first, then come out?’” he says.
Experiences like this are also borne out in the stats (or at least, the few data sets that have been gathered). 37% of LGBTQ+ startup founders refrain from revealing their sexuality when dealing with investors, according to a 2016 study by Startout, a non-profit that supports LGBTQ+ entrepreneurs.
It’s partly experiences like this that led Tooley to found i³ investing, which seeks to foster “community, connection and capital” for LGBTQ+ founders and investors.
It helps investors find startups led by queer founders and helps queer entrepreneurs set up local “chapters” in their home cities. These are communities that run "meetups for storytelling, community mentoring, and safe spaces for queer exploration".
“Our theory of change is grassroots driven,” Tooley explains. “We want to support the community in opening up their own i³ chapters in different hubs.”
Since launching earlier this year, i³ now has active communities in Berlin and London, and is hoping to add more soon.
For founders like Williams, the impact of Tooley’s work is hard to overstate, particularly as help didn't seem to be coming from outside the queer community.
“It's not everyone else's responsibility to create space for us[...] we have to create that space for ourselves. We have to be more assertive,” he says.
Institutional discrimination is often even worse for LGBTQ+ founders who are also people of colour, disabled or working class.
For instance, in Williams’s case, as a disabled, neurodivergent and LGBTQ+ man, he faces a more exaggerated form of discrimination than someone who is only marginalised in one of those ways.
This is described by the term “intersectionality” which means that multiple forms of marginalisation interact to create “interlocking” forms of oppression. But LGBTQ+ entrepreneurs are starting to turn this into a source of strength.
Tooley has coined a term called “intersectional incredibles”, which he describes as “looking at your intersectionality and the positive outcomes that come from it — like heightened innovation, creativity, empathy and grit — while still fighting systemic issues”.
Williams from Clu agrees. “The more marginalised you are, the more of a creative problem solver you are,” he says. “It’s the kind of grit, resilience, determination, creativity, problem solving, that comes from navigating a world that was not designed to set you up for success, that makes you a brilliant entrepreneur.”
However, he stresses that it’s also important not to romanticise the narrative of overcoming adversity, which can “become so acute that we become disconnected with the actual reality and the help that we need”.
VCs are missing out
Another founder who’s encountered challenges as a queer person is Charlotte Fountaine.
She came out as bisexual later in life and found the process “stressful and alienating”, especially with the limited resources and small numbers of LGBTQ+ therapists available.
This led Fountaine to launch Kalda, an app that provides accessible information and mental wellbeing resources for LGBTQ+ people. But, having begun her career in the public and third sectors, she says she found the world of VC exclusionary from the outset.
“There's a lot of jargon that people have to understand to get into the VC world. And then there's a lot of networking,” Fountaine recalls. “In general, money is concentrated in the hands of certain people, and then people tend to connect with and give money to people who are like them.”
She believes that this lack of diversity among investors translates into a lack of investment into diverse companies, depriving many communities of important products that might meet their needs.
“The results are that diverse founders are not getting enough money. It means products aren't reflective of our experiences,” she adds.
Some VCs agree. Speaking to Sifted in June, Antler director Sarah Finegan told Sifted that she didn't know any other queer VCs, and that the industry sorely needs more LGBTQ+ visibility and access to more diverse networks.
These concerns are reflected in the numbers: according to Backstage Capital, a VC that specialises in supporting underrepresented founders, fewer than 1% of deals go to LGBTQ+ founders in the US.
Tooley from i³ investing stresses that, to find these opportunities, VCs “need to go to those hard to reach spaces, whether that be through local council entrepreneurial programmes or lesser known universities”.
Apart from i³ investing, other communities for queer entrepreneurs in Europe include Out in Tech (which has chapters in Madrid and Stockholm) and SeriesQ (which is active in the UK).
He adds that the business case for seeking out LGBTQ+ founders is even stronger in emerging economies, where it is often more dangerous to be queer: “Those are deals that people won't even be aware of, because it's harder to be queer there. It’s an opportunity to have an untapped source of deal flow.”
Tooley is launching a “first of its kind” large-scale research project on queer founders and their “intersectional incredibles” philosophy. He is seeking additional partners and sponsors.