APX Voices
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APX Voices

Survey results: Finally we get to know our queer founders better!

Now we know more! As an early-stage investor, we at APX launched an important survey among founders last November. Our goal was to learn more about the queer founder community and its challenges. How many founders are even part of the LGBTQIA+ community? Have they addressed their sexual orientation in front of colleagues or investors? What feedback do they get when they come out as queer? We asked founders around the world these questions and more — and got some initial answers.

But why is it even relevant to learn how queer founders are doing? After all, sexual orientation shouldn’t matter when it comes to creating a good product, finding investors and employees, and bringing the product to market. However, the few figures that already exist on queer founders show that sexual orientation repeatedly leads to bias and poses particular challenges for founders.

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, 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 LGBTIQIA+ 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 LGBTQIA+ people are, on average, more highly educated than heterosexuals, the study found.

As very early-stage investors, we at APX want to take an active role in contributing to more diversity in the startup scene. As of 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 LGBTQIA+ founders. On the one hand, this demands that we have a better understanding of queer founders in Europe and, on the other hand, that we must identify their problems and challenges.

For this reason, we have decided to begin a study on European entrepreneurs with different sexual orientations and gender identities. The goal is to fill some of the existing data gap on the topic of queer entrepreneurs globally. With around 70 founders responding to our survey, the study is of course not representative, but it gives a good picture of how queer founders assess their situation.

The majority finds it somewhat uncomfortable to reveal sexuality or gender

For example, 80 percent of queer founders said they found it somewhat uncomfortable to reveal their sexuality or gender to investors or external business partners. Half of queer founders even said they found it uncomfortable to come out to colleagues or acquaintances. Overall, twice as many queer as heterosexual founders said they felt somewhat uncomfortable disclosing their sexuality to peers, investors, business partners, and employees.

In addition to answering questions with predefined response options, respondents were also able to share other assessments or information that was important to them. For example, one founder wrote, “I’m much more careful about disclosing sexual orientation to clients, especially in the sports and finance industry.” This statement shows that the concern about disclosing one’s sexuality also depends on the industry in which one works. Another respondent said, “My sexual orientation is in no way a topic that I want or need to address, not because of what it is but just because it is not relevant.”

For us as early-stage investors, this also shows the range of sensitivities. While some are afraid of negative experiences or have even had them, others don’t care to deal with the topic. Working with founders must therefore always be very individual and tailored to the respective personalities.

Whether one’s own sexuality or gender has had an influence on the success of the start-ups to date was also answered differently by the founders. More than 50 percent said that it had had an influence, and 15 percent even said that this influence had been “high”.

Some respondents viewed the influence of their sexuality on their own business as positive. For example, one wrote: “I noticed being gay also means being cross-connected because of other interests and hobbies such as music or arts which connect people and may result in a larger network of friends and supporters.” For other respondents, the mood was somewhat somber. One comment reads like this: “The loneliness and sadness increases, no matter if you are in a safe environment or a stressful and judging environment like entrepreneurship. Others will never understand you and will not get why you want to achieve more during early age.”

Nevertheless, some have had negative experiences: 20 percent of all surveyed founders have experienced discrimination from peers or employees. 35 percent of the founders have experienced discrimination from investors and business partners. This is an alarming figure, which should give us pause for thought, even with such a small number of respondents. We as APX must then consider: How can we contribute to the well-being of our founders? Where can we support them when they have negative experiences with other investors? How can we help founders feel safe in their own environment?

Some founders said in their comments on discrimination that they had already had employees who quit after finding out that the founder was gay. Other founders thought that it was important how one dealt with one’s own sexuality: “It is hard to experience discrimination if you don’t talk openly about it,” said one of them.

What is certain, however, is that just under half of the respondents agreed that members of the LGBTQIA+ community are treated differently in the startup scene than heterosexual cis people. Some of the respondents attributed it to whether gender identity and sexual orientation are visible or in which region of the world you start your business. Since this should never be a point one should take into consideration, it gives us — at APX — food for thought about how we can support queer founders on this topic.

But there are also positive things we learned in our survey. For example, 45 percent of queer respondents say they use their influence to advocate for the needs of the LGBTQIA+ community. That there is still room for improvement here is shown by the number of heterosexual cis founders. Here, only 26 percent said they do something for the concerns of this community. For us at APX, this raises the question of how we can work towards even better interaction between our startups. On a professional level, the exchange already works very well, but perhaps more focus is needed on interpersonal and personal concerns and challenges. We can only help each other if we keep in touch.

70 percent of our respondents stated that when hiring new people, they make sure that they share the values of the LGBTQIA+ community. Exactly which values were not defined in the question and this can certainly be sharpened in future surveys. However, the scope for interpretation also offers the opportunity to express one’s own ideas and perceptions in the comments. For example, one study participant writes, “We have never explicitly asked about that (I don’t think it’s allowed) but try to gauge our potential employees’ openness toward anything that is not considered the (hetero cis white) norm.” Another concretizes: “We screen for general cultural fit, with no particular focus on LGBTQIA+ acceptance — but rather general openness to diversity.”

We particularly liked a comment from another column in the survey. Here, one participant simply wrote: “Diversity is richness”. This is also our credo at APX and we are happy that through our survey we have already learned so much from founders around the world and especially in Europe. It will help us to understand the particular challenges of a diverse startup scene and to better advocate for the needs of queer founders, to offer them a safe environment in which they can develop freely.

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Europe’s leading earliest stage VC. Based in Berlin and backed by Axel Springer and Porsche, we support the most ambitious pre-seed startups. APX.vc.