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 seeking to do the identical for the European LGBTQ+ startup group. 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 firms with at the very least one founder or government who identifies as a member of the LGBTQ+ group. The Berlin-based agency is at present 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 firms from the pre-seed to Sequence A levels. The agency is sector agnostic and invests in Europe and past. Identification.vc has backed 4 firms to date, together with eco.mio, a software program plugin that helps firms handle the environmental influence of their enterprise journey, and Paxton, an AI authorized tech firm.
“Nearly all of LGBTQ+ founders: They don’t seem to be out to their traders as a result of they really feel that might be an obstacle,” Klein advised TechCrunch. “We predict that could be a massive mistake and [that means] you don’t have this trusted relationship together with your traders. These traders who don’t prefer it, you don’t need to have them in your cap desk. You must be capable of be your self.”
Klein mentioned they’ve gotten loads of constructive 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 had been looking to find a way to back LGBTQ+ founders.
It’s not shocking that traders see the worth in backing various groups — quite a few studies have proven various groups outperform non-diverse groups — but it surely’s nonetheless refreshing to see that LPs and the European startup group have embraced the agency. Identification.vc’s narrative is a vibrant spot at a time when some companies targeted on investing in various founders have struggled to raise within the U.S. and others have come up below legal pressure for his or her thesis.
“To this point it’s been very supportive from traders and different VCs. They like to work with us and our expertise,” Klein mentioned. “Once I discuss to common funds, in addition they know they need to be extra various. They see us as a chance to extend their range. We’ve not but skilled that backlash, perhaps as a result of Europe is a lot extra superior on the subject of range investing.”
Whereas the agency received inspiration from Gaingels, Klein mentioned they deliberately determined to do issues a bit of bit otherwise. He mentioned they wished to boost a standard fund, versus a syndicate, in order that it will make follow-on investments simpler.
The fund dimension was intentional, too. Whereas some folks advisable that the agency begin with a smaller fund, say €20 million, Klein mentioned they didn’t need to do this. They wished a bigger debut fund to make an announcement of how critical they had been concerning the alternative. Klein added that they wished to gather a excessive administration charge, too, in order that they’d have sufficient capital to begin to construct the European group for LGBTQ+ founders and traders.
“Within the U.S., there’s a actual LGBTQ+ investor group — that’s not the case in Europe,” Klein mentioned. “We have to have assets and individuals who can do group work.”
The agency launched a Slack channel for the group, which at present 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 mentioned these initiatives not solely assist their agency construct group however may also assist with deal circulation for Identification.vc and assist startups discover different sources of capital, too.
“We are going to convey collectively the local people, and also you’d be shocked how little LGBTQ+ founders and traders are linked,” Klein mentioned. “We may 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 convey them collectively.”
The agency has solely raised 30% of its fund goal thus far, but it surely has already began to make a distinction — one that can proceed to develop because the agency brings in additional capital.
“There are a number of the explanation why we predict it’s wanted,” Klein mentioned about Identification.vc’s existence. “We imagine strongly we will outperform due to the truth that diversity-driven efficiency and backing the LGBTQ+ group give us a novel entry to startups and entry to fascinating offers.”
