Identity.vc: Empowering LGBTQ+ Startups in Europe
In 2023, Til Klein and Jochen Beutgen launched Identity.vc, a Berlin-based venture firm that focuses on investing in early-stage companies with LGBTQ+ founders or executives. Inspired by the success of Gaingels, a U.S.-based syndicate supporting LGBTQ+ founders, Klein and Beutgen saw an opportunity to fill a gap in the European startup community. With the aim of creating a trusted and diverse investor network, Identity.vc seeks to empower LGBTQ+ entrepreneurs and drive innovation.
Raising €50 million for its debut fund, Identity.vc has already secured €15 million. The firm writes checks ranging from €250,000 to €1.5 million and invests in companies at various stages, from pre-seed to Series A. Its portfolio includes eco.mio, a software plugin that helps companies manage their environmental impact during business travel, and Paxton, an AI legal tech company.
An important aspect of Identity.vc’s mission is encouraging LGBTQ+ founders to be open about their identities with investors. Klein believes that hiding one’s identity can hinder the development of a trusted relationship with investors. By being authentic, founders can attract investors who embrace diversity and align with their values. This approach has garnered positive feedback and made fundraising relatively smooth for Identity.vc. In fact, a recent Morgan Stanley survey found that 45% of U.S. investors are actively seeking ways to support LGBTQ+ founders.
Investor interest in diverse teams is not surprising, as numerous studies have demonstrated that diverse teams outperform non-diverse ones. However, Identity.vc’s success in attracting LPs and gaining support from the European startup community is still notable. While some U.S. firms focused on investing in diverse founders have faced challenges raising funds or legal pressures, Identity.vc’s narrative stands as a shining example of progress.
Drawing inspiration from Gaingels, Klein and Beutgen intentionally pursued a different approach. They opted for a traditional fund structure instead of a syndicate, which enables easier follow-on investments. Furthermore, they chose to launch with a larger debut fund of €50 million to demonstrate their commitment to the LGBTQ+ startup ecosystem. The higher management fee associated with the fund ensures that Identity.vc has sufficient capital to build a strong community for LGBTQ+ founders and investors in Europe.
Recognizing the need for greater connectivity within the LGBTQ+ startup community, Identity.vc has established a Slack channel with 300 members. The firm has also organized events in Madrid, Amsterdam, and Paris to facilitate networking opportunities for LGBTQ+ founders and investors. These initiatives not only foster community building but also enhance deal flow for Identity.vc and help startups access additional sources of capital.
While Identity.vc has only raised 30% of its fund target so far, its impact is already evident and poised to grow with increased capital. By focusing on diversity-driven performance and supporting the LGBTQ+ community, Identity.vc gains unique access to startups and compelling investment opportunities.
In conclusion, Identity.vc’s commitment to empowering LGBTQ+ startups in Europe is commendable. By creating an inclusive and supportive investor network, the firm aims to drive innovation, foster diversity, and create value for both founders and investors. As the firm continues to raise funds and expand its reach, it is poised to play a pivotal role in shaping the future of the European startup ecosystem.
