As Ada Ventures—a UK fund dedicated to investing in overlooked founders—so succinctly puts it: “talent is evenly distributed but, at present, opportunity is not.”
We’ve previously researched and highlighted inequalities in the high-growth space, particularly surrounding funding statistics on UK female entrepreneurs. We found that 75% of high-growth UK companies do not have a woman in their founding team. To place our data within a wider context of representation: one in five venture capitalists studied at Oxford, Cambridge, Harvard or Stanford; and shockingly, the angel investor community is 91% male, and 93% white.
But we face a distinct challenge when it comes to reporting on LGBTQ+ representation.
Partly because many people don’t want to publicly identify as LGBTQ+—either for privacy, or because they feel it could hurt them professionally. More than a third of LGBTQ+ staff (35%) have hidden their sexuality at work for fear of discrimination, and four in 10 people surveyed experienced homophobic or transphobic “banter” in the investment management industry.
Largely, though, the issue with reporting is that sufficient data on LGBTQ+ individuals in the high-growth space is not available—making it difficult to gain representative samples. We can analyse by male and female, because this data is readily accessible through Companies House. Data on sexuality is not systematically recorded in this way, and it’s much harder to collect and store due to factors such as visibility and privacy. Surveys have great potential, but they often involve self-selection bias.
We believe that great data, applied intelligently, benefits society. As an example, let’s look at The Startout Pride Economic Impact Index…
The StartOut Pride Economic Impact Index
StartOut is the leading non-profit and source of data insights on LGBTQ+ entrepreneurs in the US. It launched the StartOut Pride Economic Impact Index (SPEII) using millions of data points from public and private data providers. AI-powered crawlers filled in the gaps, scraping anonymised data on publicly-identified LGBTQ+ entrepreneurs from the web.
SPEII intends to fill the LGBTQ+ high-growth data and research void, and to map the “unrealized potential” of founders and startups—to quantify what could be if everyone had equal access to funding and resources. StartOut foregrounds the importance of this unrealised potential during COVID-19 especially, when the world is focussing on revitalising economies and creating job opportunities.
The result of this big-data project is an interactive, near real-time interface that allows you to examine macro trends and analyse LGBTQ+ entrepreneurial impact in each state.
SPEII unveiled some shocking insights:
- Inclusive access to resources would create over 3 million jobs in the US
- US funding is particularly concentrated: 80% of the total US funding for LGBTQ+ entrepreneurs went into San Francisco
- High-growth ecosystems contain less than one-tenth of the LGBTQ+ founders that would be expected if everyone had equal access to funding.
These statistics underline the importance of having solid data, and the insights it can unlock. If we had such a resource as SPEII in the UK, we could better monitor and calibrate efforts towards improving diversity.
The UK has the largest venture market in Europe, and capital has incredible influence for change. Yet as nonprofit Diversity VC writes, “the founders that face the most barriers to capital are often the ones that have multiple structural disadvantages”, which compounds the issue. A more inclusive approach to funding and a more diverse network of role models would foster a more diverse ecosystem overall; diverse companies are more innovative and perform better across countless studies.
UK non-profit organisations like Stonewall and Diversity VC are doing great research on diversity, but data on LGBTQ+ founders in the high-growth space remains lacking.
Organisations, funds and resources headquartered in the UK
Even if we don’t have such concrete data, though, there are still many inclusive organisations, funds, and resources available in the UK. Today, we’ll spotlight some of those organisations and hear some opinions on the state of LGBTQ+ diversity within the UK.
1. Tech London Advocates LGBTQ Group
Founder: Garry Bernstein
One of the UK’s leading LGBTQ+ organisations is the Tech London Advocates LGBTQ group. TLA LGTBQ aims to create a community which supports LGBTQ+ individuals and entrepreneurs—particularly in tech. It is a community-led, free, grassroots network facilitating LGBTQ+ professionals across the world to connect and learn from each other. The group also advises and consults companies on how they can identify hidden biases and provides information on how to foster more inclusive workplaces.
“There’s a huge desire to build inclusive workplaces,” Garry Bernstein, founder at TLA LGBTQ tells us, “particularly in smaller startups, they want to be inclusive but don’t know how.” TLA LGBTQ is currently partnering with a wide range of stakeholders, including bigger companies such as Sainsburys, to capture the knowledge they’ve acquired from operating diverse and inclusive workplaces. “We will publish a portfolio of resources, a playbook, that will help guide smaller businesses who are embarked on their own diversity journeys”, Garry says.
Ultimately, TLA LGBTQ hopes to make the UK the destination of choice for new founders. “Funding is a huge ingredient of this”, Garry explains, “but how can we say we’ve got an edge if we don’t measure it?” While “people understandably have a real sensitivity recording sexual orientation, at the moment the barriers aren’t talked about or interrogated enough.”
Garry zeroed in on the trend in business at the moment of companies looking to be more data-driven, and said that “data showing what we know already—that diverse workplaces are more innovative and successful—puts an onus on people to find solutions.” Diversity and inclusion is no longer “a nice thing to do”, but an “imperative”, and “measuring it is a huge part of that”.
2. Ada Ventures
Founders: Check Warner and Matt Penneycard
Ada Ventures was co-founded by Check Warner—the CEO of Diversity VC—and Matt Penneycard. Based out of Notting Hill, Ada Ventures launched its first fund of $34m in 2019 and invests in early-stage startups—usually post-product, pre-revenue, and tech-based.
Its deal-sourcing system is open to everyone, yet actively seeks out underrepresented founders—particularly women, LGBTQ+, BAME, and those outside of London. Diversity VC has previously demonstrated that a lower proportion of all-female teams have the benefit of a warm introduction to investors than that of mixed-gender or all-male teams. Whilst we would expect that this inequality of access maps itself onto other underrepresented groups, the lack of data on LGBTQ+ professionals makes it difficult to determine.
“We know how narrowly-focused the venture capital industry can be, and how ‘warm introductions’ are bad for founders from underrepresented backgrounds”, Check tells us. “It is this ‘old boys’ network’ that often excludes under-represented founders including, of course, LGBTQ+ founders.”
So to find the bold ideas that often go unrecognised through the traditional VC channels, Ada Ventures has formulated a unique deal-sourcing system to ensure the most inclusive pipeline possible, based around a network of scouts. These scouts are strongly connected to founder groups currently underrepresented in early-stage tech, and seek investment deals for the firm.
According to Check, the network rewards scouts for surfacing deals with both an immediate and longer-term incentive: “If Ada Ventures invests in the company,” she explains, “the scout in question is incentivised by a finder’s fee and a longer-term, carried interest incentive. The Scout can invest the finders fee directly into the company, or take as cash”. Ada ventures sees 20% of their deal flow come through this network, and intends for this scheme to “in turn empower a generation of diverse entrepreneurs and community leaders to become investors, equipping them with the capital, support and resources they need.”
If you have an idea that you think would be of interest to Ada Ventures, pitch it here!
3. Series Q
Founder: Barry Whyte
Series Q is a registered non-profit founded in 2016 and based in London. Series Q fulfils the role of an LGBTQ+ network for employees in startups, which are often too small to have dedicated networks within each workplace. It welcomes people from all industries and from across the UK, seeking to support, inspire, and forge new connections between members.
It runs regular informal events, touching on topics such as “minority stress” and the barriers to LGBTQ+ mental health treatment. Series Q shares resources, insights, and support, and is partnered with StartOut and Eurout (the leading LGBTQ+ business graduates and alumni organisation). Series Q was started in 2016 as the UK’s answer to StartOut and remains largely modelled upon it.
“I hope that more and more people can be their authentic self—shockingly, 62% of graduates go back into the closet when they enter the job market”, Barry Whyte, Chair of Series Q, tells us. “Ultimately”, Barry continues, “we’ve seen that visibility is a key driver of change, and this is one of our main focuses.”
Series Q has continued events through COVID-19, most recently partnering with Startout and Anthemis for a virtual function called Founder Office Hours on the 22nd October. The event will connect over 50 investors with LGBTQ+ founders in one forum, facilitating anything from mentorship and advice to direct investment. A full list of events can be found here.
Founders: Adrien and Pierre Gaubert
myGwork is an online business community headquartered in London, geared towards recruitment and networking for LGBTQ+ professionals, graduates, and employers. Users can connect with corporate partners, browse events, and news—just like on LinkedIn. The difference is that jobs advertised on myGwork are exclusively in LGBTQ+-inclusive organisations, approved by MyGwork.
MyGwork was founded in 2014 by brothers Adrien and Pierre Gaubert to address discrimination towards LGBTQ+ people in the workplace. The organisation has been praised for reinventing the way that LGBTQ+ professionals find work, providing crucial information used to choose diverse workplaces. Adrien tells us that, in the future, he hopes that more LGBTQ+ founders will “be able to be themselves and be out to their stakeholders”, and continues that they can “count on the £3.5T global LGBTQ+ spending power” for support.
Adrien mentioned that it would be great to better understand the impact of the “sexual orientation of an individual on the decision making on the part of investors.” But, from his research and experience, “mentoring programmes are found to be very effective” and also the “provision of mental health support, given that the LGBTQ+ community is particularly vulnerable and entrepreneurs are under a lot of pressure.”
MyGwork’s partnered organisations span across many industries in the UK, including Santander, EY, Clifford Chance, and Lloyd’s Banking Group. MyGWork now has over 300k users and has raised £411k in fundraising.
5. Emerald Life
Founders: Steve Wardlaw and Heidi McCormack
Emerald Life provides a range of insurance services, with a focus on accommodating members of the LGBTQ+ community. Often, seeking financial protection is a difficult process for LGBTQ+ individuals: “what’s missing for the LGBTQ+ community”, says co-founder and international lawyer Steve Wardlaw, “is the ability to pick up the phone, talk to somebody, and feel thought about”. This is particularly true in an industry that is “discriminatory to customers who don’t fit the mould of ‘normality’.”
Emerald Life recognises that LGBTQ+ individuals are often overlooked by traditional firms and policies—so, Emerald Life rewrote their policies to be more inclusive. The company was the first to include surrogate children in the definition of family in their policies, and the first travel insurer not requiring those with HIV to declare it as a medical condition if they are undetectable and on stable medication.
A relatively young, venture-stage company based in Hackney, Emerald Life has already raised £815k in equity fundraising.
6. Brand Advance
Founder: Chris Kenna
Brand Advance operates a media network that connects brands with a range of audiences, focusing on LGBTQ+ and ethnic minority representation. Chris Kenna founded Brand Advance in 2017 to create an advertising agency that reaches everyone, rather than just the mainstream—“because diverse groups were being neglected by the industry, simple as that”, Kenna tells us.
In light of this, Brand Advance supports the LGBTQ+ community by “ensuring that its media is funded and not neglected by the advertising industry.”
The company has raised £95k so far, and expects to grow quickly as brands realise the power and ROI of authentically representing diverse audiences. Inclusion and representation of diversity is not only a moral imperative, but a “commercial imperative”, as Kenna terms it. Brand Advance announced a £100k publisher fund earlier this year, supporting anyone looking to launch a publication focused on minority voices.
Want to know more about the companies in this article, and find more like them? Ada Ventures, MyGwork, Emerald Life, and Brand Advance were all located through a quick search on the Beauhurst platform.
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