New report reveals the tech community's LGBTQ+ Crisis
by Startacus Admin
75% of LGBTQ+ tech founders and investors actively conceal their gender or sexuality, says first of its kind report.
Proud Ventures, a UK collective of LGBTQ+ investors and investors, has released a new data report that, for the first time, shares data on the experiences, support and inclusiveness of LGBTQ+ members within the wider tech community. The report found 75% of founders and nearly 80% of investors withhold their identity from their peers in the ecosystem, potentially resulting in worse health conditions and lower cognitive performance.
Data on gender identity and sexual identity within the UK tech startup community has been non-existent until now. Proud Ventures, with the help of Founders Factory and Investec Wealth, has collected a unique dataset as a first step to shining a light on the problem and act as catalyst for change for a group that faces significant additional barriers to capital and growth.
Asher Ismail, CEO Coach and co-founder of Uncapped, said: “Attempts to engage with or support the LGBTQ+ startup community have been held back by the repeated question: is there actually any problem to solve? With the release of this report, the data clearly highlights the challenges experienced and opportunities for change. Sharing the findings and telling our stories is a call to action for the tech and VC industries to work towards a more inclusive future.”
Proud Ventures report found that identity concealment is a significant part of the experience for UK LGBTQ+ founders and investors. 75% of founders claim to not feel comfortable to some degree with sharing their identity and a third would not share sexuality at all. The decision to hide their preference was because LGBTQ+ founders either found it irrelevant to the situation (45%), had discomfort in sharing this information (27%) or found it harmful to fundraising efforts (18%).
It is not just founders who do not wish to disclose this information. Almost 80% of LGBTQ+ investors practice concealment with their peers, of which 26% said they would never share their identity with another investor.
Henry Lane-Fox, co-founder and CEO, said: “Recent research has shown us that concealment is a real tax on LGBTQ+ people. Academic studies have found increased concealment comes at a cost to an individual's wellbeing with a greater risk of depression, anxiety, and poorer cognitive and physical health. We need to change the script and create an open and welcoming ecosystem where people should not have to hide who they are.”
The reluctance of LGBTQ+ people to be out in the UK startup community is only one half of the problem. Proud Ventures has also found that investors are not taking action to support LGBTQ+ founders in similar ways to female or black founders. While 80% of investors say they’re taking steps to increase diversity of investments, only 26% of those were not doing anything to specifically support LGBTQ+ founders.
The extremely diverse and fragmented nature of the LGBTQ+ community also means that those who identify as ‘women’ or non-binary were affected most by barriers, discrimination and disadvantages. The research shows that cisgender gay men raised significantly more capital. Furthermore, it found that the more out a founder was about their gender identity, the less was raised and they generated less revenue.
Sarah Finegan, an investor at Antler, added: “The report findings show us the experience of LGBTQ+ founders and investors has been substantially overlooked until now. This is a timely reminder that the responsibility of the VC industry to be an inclusive engine of change has never been more important. As a rallying cry for the VC industry to effect change, my hope is the report opens the door for under-represented founders, and builds a more inclusive community with a new generation of diverse talent launching and scaling the great companies of tomorrow.”
Iain Clark, marketing director, UK, Investec Wealth, said: “We are excited to lend our support to Proud Ventures as it seeks to raise awareness of LGBTQ+ experiences among investors and the wider tech community. We hope that the research findings help to shed light on the difficulties faced by LGBTQ+ founders when raising funds for new businesses, and we look forward to working with the team to help improve the experience, and outcomes, for those within the community who are seeking funding for business ventures.”
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Published on: 7th February 2023
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