When Til Klein and Jochen Beutgen got here throughout Gaingels, the U.S.-based syndicate of angel buyers 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 firms with at the least one founder or govt who identifies as a member of the LGBTQ+ neighborhood. The Berlin-based agency is at present elevating €50 million for its debut fund and has closed on €15 million so far. 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 phases. The agency is sector agnostic and invests in Europe and past. Identification.vc has backed 4 firms so far, together with eco.mio, a software program plugin that helps firms handle the environmental affect 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 buyers as a result of they really feel that may very well be a drawback,” Klein informed TechCrunch. “We expect that could be a large mistake and [that means] you don’t have this trusted relationship along with your buyers. These buyers who don’t prefer it, you don’t wish to have them in your cap desk. It’s best to be capable to be your self.”
Klein mentioned they’ve gotten a whole lot of optimistic suggestions on the technique, and fundraising hasn’t been too troublesome so far. He added that LPs are searching for funds that give them this type of diversification. He cited a current Morgan Stanley survey that discovered that 45% of U.S. buyers have been trying to discover a technique to again LGBTQ+ founders.
It’s not shocking that buyers 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 companies targeted on investing in numerous founders have struggled to lift within the U.S. and others have come up beneath authorized strain for his or her thesis.
“To this point it’s been very supportive from buyers and different VCs. They like to work with us and our expertise,” Klein mentioned. “After I discuss to common funds, additionally they know they need to be extra numerous. They see us as a chance to extend their variety. We’ve got not but skilled that backlash, perhaps as a result of Europe is a lot extra superior in terms of variety investing.”
Whereas the agency acquired inspiration from Gaingels, Klein mentioned they deliberately determined to do issues a bit bit in another way. He mentioned they needed to lift a standard fund, versus a syndicate, in order that it could make follow-on investments simpler.
The fund measurement was intentional, too. Whereas some individuals really useful that the agency begin with a smaller fund, say €20 million, Klein mentioned they didn’t wish to do this. They needed a bigger debut fund to make a press release of how critical they have been concerning the alternative. Klein added that they needed to gather a excessive administration charge, too, in order that they might have sufficient capital to begin to construct the European neighborhood for LGBTQ+ founders and buyers.
“Within the U.S., there’s a actual LGBTQ+ investor neighborhood — that’s not the case in Europe,” Klein mentioned. “We have to have assets and individuals who can do neighborhood work.”
The agency launched a Slack channel for the neighborhood, 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 buyers can meet and join with one another. He mentioned these initiatives not solely assist their agency construct neighborhood however can even assist with deal circulate for Identification.vc and assist startups discover different sources of capital, too.
“We are going to carry collectively the local people, and also you’d be shocked how little LGBTQ+ founders and buyers are linked,” Klein mentioned. “We might create worth by bringing native individuals collectively. If there may be 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 up to now, nevertheless it 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 expect it’s wanted,” Klein mentioned about Identification.vc’s existence. “We consider strongly we are able to outperform due to the truth that diversity-driven efficiency and backing the LGBTQ+ neighborhood give us a novel entry to startups and entry to fascinating offers.”
