A data gap: what we know about queer founders — and what we don’t
Promoting diversity among tech founders — how greater LGBTIQ+ visibility can shape start-up cultures
The startup scene is considered open, tolerant and colorful. But why is this, when there are hardly any statistics that provide information about queer founders? Sexual orientation is not considered relevant in founder questionnaires or financing rounds. While this is a good thing and non-discriminatory, queer entrepreneurs still face challenges that heterosexual cis people don’t.
As very early-stage investors, we at APX want to take an active role in contributing to more diversity in the startup scene. Up to now, we have not been made aware of any openly queer founders in our portfolio, because sexual orientation and identity are not important to our financing criteria. However, going forward we aim to play an essential role in creating more role models for queer entrepreneurs by actively seeking out and supporting LGBTIQ+ founders. On the one hand, this demands that we have better a understanding of queer founders in Europe and, on the other hand, we must identify their problems and challenges.
Fact check: what do we already know?
In Europe, 5.9 percent of people define themselves as queer according to a 2016 study by Dalia. The numbers range from 7.4 percent in Germany to 1.5 percent in Hungary — with answers, of course, likely to be biased depending on whether or not queer self-identification is stigmatized in the country of the person surveyed.
In the German labor market, the acceptance of queer people has improved significantly in recent decades, and legal equality has been strengthened by the 2006 General Equal Treatment Act. Nevertheless, just under 30 percent of those who identify themselves as LGBTIQ+ report being disadvantaged in their working lives, according to a 2020 study by the German Institute for Economic Research. And this is despite the fact that LGBTIQ+ people are, on average, more highly educated than heterosexuals, the study found.
A third of respondents said they had not come out to their colleagues or were secretive about their sexual orientation and/or gender identity. Trans* people in particular frequently reported experiences of discrimination in their working lives.
Although initiatives like Prout At Work aim to help create equal opportunities for LGBTIQ+ people, as well as educate employees and leaders regarding queer matters, only 37 percent of queer Germans have come out at their workplace, according to a 2019 study by Boston Consulting Group. This is far below the global average of 52 percent. Coming out to colleagues is far more common in the United Kingdom (63 percent), Brazil (60 percent) and the United States (55 percent). Startups like the app Proudr or the job fair Sticks and Stones seek to link queer employees with companies that live an open-minded corporate culture.
A problem for queer employees can also be a challenge for founders
It’s hard to believe that challenges queer people face as part of the workforce aren’t also a problem for queer founders. It’s worth taking a look at Silicon Valley — a place of longing for young creatives who are enthusiastic about technology and full of drive. Over the past few decades, startups have grown into multimillion-dollar corporations there. So what about the queer founders and companies on the ground?
Adrian Daub is a literary scholar at Stanford University. In 2016 he wrote a guest article in the Swiss newspaper NZZ about how the tech world of Silicon Valley is more conservative than people might assume. While there has always been a large proportion of gay founders in Silicon Valley, such as Keith Rabois or Peter Thiel, who were both were part of the so-called “PayPal Mafia”, its relationship with the LGBTIQ+ scene has always been characterized by a certain male dominance and inhibition, Daub says.
According to him, tolerance and acceptance of queer founders are not very advanced in the startup mecca of Silicon Valley. This is not a good omen for the LGBTIQ+ startup scene across the rest of the world.
Is a founder’s sexual identity relevant at all?
So, why should sexual identity or orientation play any role for a founder or their investors? It obviously shouldn’t matter in any decision-making process, but are there subconscious biases we should be aware of? A 2016 study by Startout concluded that more than a third of founders in the US choose to keep their sexual orientation to themselves while trying to raise investment for their idea. Did a mere whiff that potential investors might decide against investing if they knew about their sexual orientation discourage many founders from being open about it?
Gay and lesbian entrepreneurs in the US are almost four times as likely to move to California than straight entrepreneurs and 230 percent more likely to move to New York. This is because queer entrepreneurs tend to migrate to more tolerant and accepting states. These states all score high on the Human Rights Campaign’s Municipal Equality Index, which factors in non-discrimination laws and community relationships with the LGBTIQ+ community.
Conversely, Startout also interviewed investors: 48 percent of them could name at least one founder in their portfolio who identifies as LGBTIQ+. Again, 48 percent said they actively kept diversity in mind while seeking potential investment opportunities. But this claim did not help increase the number of queer founders in their portfolio. Even among investors who self-identify as LGBTIQ+ people, only half were able to name queer founders in their portfolio.
APX plans to start a survey to collect data about queer founders in a push for greater visibility
As we don’t have any data about queer founders in Germany, APX sees a need to find out more about the queer startup scene. On the one hand, to create role models for other queer founders. On the other, so that more accurate data can also be used to find out what challenges queer founders face and how to better address them in the future. This will enable us to promote a more diverse startup landscape, especially in Berlin — the home of the country’s biggest LGBTIQ+ community.
APX, therefore, supports initiatives such as Unicorns in Tech, a global LGBTIQ+ community in the tech industry, and Inclusive Tech, an international organization working to close tech’s diversity gap. APX also plans to conduct a study with 500 European founders who self-identify as LGBTIQ+ and a control group of another 500 founders, who identify as heterosexual cis people and ask them questions about what impact their sexual orientation and identity have on their business and what challenges it brings. At APX, we are convinced that we can only get a more colorful startup scene if queer founders are given more visibility in everyday life. This will automatically lead to better, more creative, more advanced inventions. And finally, perhaps the most important thing, to an inclusive togetherness.
+++ UPDATE 4th November 2021 +++
We’re very excited to launch the survey now!
We hope to get at least 1000 responses, including 500 LGBTIQ+ founders, so we need your support. If you’re a founder — regardless of your sexuality and gender identity — please fill out our survey, and share it with your network. For all non-founders, please share this survey as Europe-wide as you can:
APX Survey: Impact of gender identity and sexual orientation in the European startup scene
apx.berlin
Thank you!
