February 7, 2023

Three quarters of LGBTQ+ founders hide their identity from investors

That's according to a new report, which is the first to collect data on the experiences of LGBTQ+ founders in the UK

Asher Ismail, member of Proud Ventures

European tech is really bad at diversity. Just 1% of VC funding went to all-women founding teams in 2022 and Black founders raised 0.25% of UK VC funding between 2009-19. 

The figure for LGBTQ+ founders? We don’t know, because the data doesn’t exist: nobody is collecting it and, as a new report has discovered, many founders wouldn’t want to share it anyway.

Three quarters of LGBTQ+ founders withhold their identity from investors, according to a new report from Proud Ventures, a UK collective of LGBTQ+ investors. 


The report heard from 118 LGBTQ+ founders and 61 investors (not all of whom identified as LGBTQ+) in the UK, and is one of the first to look into the experiences of LGBTQ+ people in the tech ecosystem. 

It found that a fifth of LGBTQ+ founders thought that sharing their identity would harm fundraising efforts and that lesbian founders raise 22x less than gay founders. It also found that 79% of LGBTQ+ investors sometimes hide their identity from others in the industry.

One in three of LGBTQ+ founders would never share their identity

The vast majority of LGBTQ+ founders didn’t feel comfortable sharing their identity with every investor they met — and 34% said they would never share that information. For those founders who are gender minorities (anyone whose gender identity is not the same as it was at birth, like transgender, non-binary or gender non-conforming) the figure rose to 57%.

Nearly 20% said they didn’t share their identity because they thought it could hurt their business. Just under half of LGBTQ+ founders said they didn’t share their identity because they didn’t think it was relevant, while over a quarter said they didn’t feel comfortable opening up to 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?’” founder and CEO of angel syndicate i³ investing Christian Tooley told Sifted last year.

Investors also withhold their LGBTQ+ identity from other investors. 79% said they concealed it to some extent and 26% said they’d never share that information with others.

Additional barriers to fundraising

35% of founders thought their ability to raise capital had been affected by their LGBTQ+ identity. 

One cisgender bisexual founder said that an investor pulled out of a deal once they discovered they were gay, saying there wasn’t a “cultural fit”.

“The experience of rejection because of something so personal made me afraid to be myself for 12 months afterwards,” the founder said. “I found myself lying and pretending I had a girlfriend at work and to investors… I even found myself drinking more and researching conversion therapy.”

There are also clear differences in the LGBTQ+ community around the amount of funding raised. Non-binary, gender non-conforming and lesbians have the most difficulty raising cash from investors.

While sexual minorities — people who are gay, lesbian, bisexual or queer for example — who are open about their identity tended to raise more than those that weren’t, the same isn’t true for gender minorities.


Lack of support from investors

While 80% of the investors surveyed said that they are taking steps to support “diverse” founders, just 26% said they are specifically taking steps to support LGBTQ+ founders.

VCs which do have LGBTQ+ founders in their portfolio are far more likely to be actively looking to be more inclusive than those with no LGBTQ+ founders in their portfolio.

What can VCs do to level the playing field?

The report listed a number of recommendations for investors to better attract and support LGBTQ+ founders:

  • Clear signage on LinkedIn and the firm's website stating support for LGBTQ+ founders and actions being taken to address the funding gap.
  • Adding pronouns to an email signature. Respondents said this was a clear signal that an investor was LGBTQ+ inclusive.
  • More training internally, led by senior leadership.
  • Prioritising diverse talent. Founders commented that seeing more LGBTQ+ VCs would have a big impact on how comfortable they felt being open about their gender and sexuality.
  • Quantifying diversity, equity and inclusion. Adopting the Diversity VC Standard and surveying portfolio founders to understand which minority groups have and haven’t been backed are two ways to do this.

Kai Nicol-Schwarz

Kai Nicol-Schwarz is a reporter at Sifted. He covers UK tech and healthtech, and can be found on Twitter and LinkedIn