by Chris Davidson, Head of StartOut Growth Lab
As the head of StartOut Growth Lab, a 6-month startup accelerator that offers top quality mentoring, education, and networking opportunities for young companies that happen to be founded or co-founded by LGBTQ+ entrepreneurs, I’ve found that LGBTQ+ business owners face two key obstacles in building and maintaining a successful company: Access and representation.
LGBTQ+ founders do not have the same access to resources like talent, startup capital, growth capital, and skills development as non-LGBTQ+ folks. Access to these valuable resources are typically based on one’s personal network and ecosystem, and I find that our networks and ecosystems may not be as broad as some of our allies due to our upbringing or the communities that we find ourselves in.
I see numerous business owners who do not have the ability to borrow money from friends, family members, or banks to get the money to either start a company or to allow for it to grow quickly. Additionally, once the company is up and running, I have witnessed LGBTQ+ founders not able to attract or be able to pay for top human capital resources to compete with other non-LGBTQ+ founded businesses. At times, we can be at a competitive disadvantage in our businesses because of this factor.
A few key aspects of being a successful business owner are having a great blueprint of what a successful business is, having the right plan to build out that blueprint, and being able to limit one’s mistakes. Just as it is important for LGBTQ+ folks to have representation in the media, it is also a huge advantage to see this representation in the business arena.
I find that business owners who have business role models or a company and founder to learn from and ideate with have a higher likelihood for success. They also have more opportunities to navigate the business planning and execution stages more effectively. Unfortunately, the large majority of business owners can’t find a role model or business mentor who looks like them to learn from.
Strategies to Overcome These Challenges
These are some challenges LGBTQ+ business owners face, but what are some strategies or resources that can help them overcome these challenges? The most successful folks I’ve worked with have overcome these challenges by 1. Finding a mentor/role model, 2. Intentionally expanding their ecosystem, and 3. Leaning into their resourcefulness.
1. Find a Mentor.
The best single advice I received in business was in 2000 from John Havens, a successful business friend of my father’s, and he said, “To be successful, you need to figure out what not to do and that will show you, through the process of elimination, the correct path.”
Learning from someone else’s mistakes, or as I like to say, “Leveraging someone else’s learning curve,” can structurally shift one’s company. I cannot tell you how many times I’ve seen companies with great mentors avoid disastrous mistakes because they have someone to ideate with and bounce ideas off of. And more specifically, being able to bounce ideas off of someone that has done a version of what you are trying to do is a huge factor that contributes to one’s success.
StartOut is an amazing resource to find a business mentor. Additionally, most major metropolitan areas have a National Gay and Lesbian Chamber of Commerce which also serves as an epic resource.
2. Lean into Resourcefulness.
Another key strategy successful LGBTQ+ business owners implement is leveraging their unique ability to be resourceful. Growing up LGBTQ+ allows many members of the community to be resourceful and creative.
When I remind a founder that they have been through much more challenging situations in their lives than the struggles they find themselves in business-wise, a little light goes off in their heads. I can even see it in their faces. I will then ask the business owner, “I can see a change in your face and how you are looking. Where did you just go in your head?” Nine times out of 10, I hear something along the lines of, “Oh, I have gotten through much more challenging times, thank you for this reminder…I can figure this out.”
3. Intentional Ecosystem Expansion.
The final strategy I have seen work for LGBTQ+ business owners is intentional ecosystem expansion. Essentially, ecosystem expansion is just networking and building your network. However, there is a distinction: most folks think that networking is an accidental process that happens naturally. The truth of the matter is that to network and to network well, you need an intention and process to get the most benefit.
The easiest way to start is to create what I call a “Hit List.” Create a list of 15 to 20 connections or relationships that you currently do not have, but would structurally benefit your network or business. Once you create the “Hit List,” you need to get to work to create strategies on how you are doing to create these new relationships.
As discussed above, the LGBTQ+ business owner is uniquely qualified based on our resourcefulness and ability to be creative to achieve these connections, allowing for your business to be more successful.
An LGBTQ+ business person is uniquely qualified to face the many challenges they will encounter in the business world. Using the resources available to them and trusting themselves to get through these challenges will make all the difference.
Over the past six years of the StartOut Growth Lab’s existence, 65 companies have graduated from the startup accelerator, raising $763 million in funding and creating more than 3,650 jobs. When we work together to navigate the obstacles our community faces, practically anything is possible.
Chris Davidson has a 25+ year career investing in and advising companies starting in investment banking, real estate private equity and development, hedge fund, commodity fund and culminating in venture capital. He is part of the LGBTQ+ community and is an advisory board member and Head of the StarOut Growth Lab, an incubator for LGBTQ+ entrepreneurs.