When Til Klein and Jochen Beutgen got here throughout Gaingels, the U.S.-based syndicate of angel traders backing LGBTQ+ founders, they questioned why there wasn’t a agency trying to do the identical for the European LGBTQ+ startup neighborhood. 5 years later, when a agency like that also didn’t exist, Klein and Beutgen determined they need to attempt to launch one themselves.
In 2023, the pair launched Identification.vc, a enterprise agency that invests in early-stage corporations with at the very least one founder or govt who identifies as a member of the LGBTQ+ neighborhood. The Berlin-based agency is presently elevating €50 million for its debut fund and has closed on €15 million to date. The founding companions additionally introduced on Mari Luukkainen, who has prior working and investing expertise, as a principal.
The agency writes checks that vary from €250,000 to €1.5 million into corporations from the pre-seed to Collection A levels. The agency is sector agnostic and invests in Europe and past. Identification.vc has backed 4 corporations to date, together with eco.mio, a software program plugin that helps corporations handle the environmental impression of their enterprise journey, and Paxton, an AI authorized tech firm.
“The vast majority of LGBTQ+ founders: They don’t seem to be out to their traders as a result of they really feel that may very well be an obstacle,” Klein advised TechCrunch. “We expect that may be a large mistake and [that means] you don’t have this trusted relationship along with your traders. These traders who don’t prefer it, you don’t need to have them in your cap desk. It’s best to have the ability to be your self.”
Klein stated they’ve gotten numerous optimistic suggestions on the technique, and fundraising hasn’t been too troublesome to date. He added that LPs are searching for funds that give them this type of diversification. He cited a latest Morgan Stanley survey that discovered that 45% of U.S. traders have been trying to discover a strategy to again LGBTQ+ founders.
It’s not shocking that traders see the worth in backing numerous groups — quite a few research have proven numerous groups outperform non-diverse groups — nevertheless it’s nonetheless refreshing to see that LPs and the European startup neighborhood have embraced the agency. Identification.vc’s narrative is a shiny spot at a time when some corporations targeted on investing in numerous founders have struggled to lift within the U.S. and others have come up below authorized strain for his or her thesis.
“To date it’s been very supportive from traders and different VCs. They like to work with us and our expertise,” Klein stated. “Once I speak to common funds, in addition they know they need to be extra numerous. They see us as a chance to extend their range. We’ve got not but skilled that backlash, perhaps as a result of Europe is a lot extra superior in terms of range investing.”
Whereas the agency obtained inspiration from Gaingels, Klein stated they deliberately determined to do issues just a little bit in a different way. He stated they wished to lift a conventional fund, versus a syndicate, in order that it will make follow-on investments simpler.
The fund dimension was intentional, too. Whereas some folks really useful that the agency begin with a smaller fund, say €20 million, Klein stated they didn’t need to do this. They wished a bigger debut fund to make an announcement of how severe they have been in regards to the alternative. Klein added that they wished to gather a excessive administration price, too, in order that they might have sufficient capital to begin to construct the European neighborhood for LGBTQ+ founders and traders.
“Within the U.S., there’s a actual LGBTQ+ investor neighborhood — that’s not the case in Europe,” Klein stated. “We have to have assets and individuals who can do neighborhood work.”
The agency launched a Slack channel for the neighborhood, which presently has 300 members. The agency has additionally held occasions in Madrid, Amsterdam and Paris to create areas the place LGBTQ+ founders and traders can meet and join with one another. He stated these initiatives not solely assist their agency construct neighborhood however may also assist with deal circulation for Identification.vc and assist startups discover different sources of capital, too.
“We’ll carry collectively the local people, and also you’d be shocked how little LGBTQ+ founders and traders are linked,” Klein stated. “We might create worth by bringing native folks collectively. If there’s an early-stage startup that’s too early for us and an angel investor, I can carry them collectively.”
The agency has solely raised 30% of its fund goal thus far, nevertheless it has already began to make a distinction — one that may proceed to develop because the agency brings in additional capital.
“There are a number of the explanation why we predict it’s wanted,” Klein stated about Identification.vc’s existence. “We consider strongly we will outperform due to the truth that diversity-driven efficiency and backing the LGBTQ+ neighborhood give us a singular entry to startups and entry to attention-grabbing offers.”
