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State of U.S. LGBT Entrepreneurship

By StartOut - 2017-01-04

Summary

Startups founded by LGBT entrepreneurship community at risk for discrimination—affecting businesses location, ability to raise capital and how they build trust with investors.

"LGBT entrepreneurs specifically choose diversity-friendly states to start their companies; raise less capital than their straight counterparts and have to balance the risk of homophobia and discrimination with creating authentic relationships with investors, customers and partners."

Main Document

New Study Sheds Light on State of LGBT Entrepreneurship in the U.S. - More than one in three LGBT entrepreneurs funded or seeking funding are not "out" to investors...

Startups founded by the lesbian, gay, bisexual and transgender (LGBT) entrepreneurship community are at risk for discrimination--affecting where they locate their businesses, their ability to raise capital and how they build trust with investors - according to a new study from StartOut, a national non-profit organization that supports, educates and connects LGBT entrepreneurs.

The study, "The State of LGBT Entrepreneurship in the U.S.," by University of Chicago Booth School of Business Clinical Professor Waverly Deutsch, a member of StartOut; StartOut Vice Chair, Vivienne Ming; Chicago Booth Adjunct Professor of Marketing and StartOut board member, Mary Shea; and StartOut board member and Chair Emeritus, Chris Sinton.

This is the first study of its kind to shed light on the experiences of LGBT founders of high-growth companies.

Combining quantitative and qualitative research methods, the study analyzes a survey of 140 LGBT entrepreneurs, a big-data set of more than 100,000 straight and LGBT founders and extended interviews intended to capture the personal stories of LGBT founders.

Among the key findings:

"It seems politically correct to say that whom one happens to love is not relevant in business, but our research shows otherwise," said Booth's Deutsch. "LGBT entrepreneurs specifically choose diversity-friendly states to start their companies; raise less capital than their straight counterparts and have to balance the risk of homophobia and discrimination with creating authentic relationships with investors, customers and partners."

"By leveraging massive online datasets, we can clearly see the profoundly negative impact of discrimination on job creation, and the unintended boon it provides states like California and New York," according to Ming, StartOut's Vice Chair and Socos Co-founder.

StartOut's groundbreaking inaugural study marks the first step in its ongoing research program aimed at painting a clearer picture of the state of LGBT entrepreneurship in the U.S. This initial study was sponsored by Credit Suisse with support from Booth's Polsky Center for Entrepreneurship and Innovation.

"Economic equality is a critical step along the continuum of progress for LGBT people," says StartOut's Executive Director Andres Wydler. "Over the next few years, we will offer policy makers and business leaders the data and evidence they need to more fully understand the LGBT entrepreneurial experience."

Founded in 2009 with chapters in New York City and San Francisco, StartOut is a national non-profit 501(c)(3) organization fostering and developing entrepreneurship in the lesbian, gay, bisexual and transgender ("LGBT") community. StartOut helps aspiring LGBT entrepreneurs start new companies; supports current LGBT entrepreneurs as they grow and expand their existing businesses; and engages successful LGBT entrepreneurs as role models and mentors. StartOut's goals are to support, educate, inspire and connect members of the LGBT community around entrepreneurship and business leadership. For more information, please visit startout.org

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