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This is Our Brick

Paving the way with capital for underestimated LGBTQ+ founders

Not long ago, the face of corporate America was exemplified by folks like Jack Welch and Eric Schmidt: white, generally older, straight men. Then in 2014, something new happened. Tim Cook, the CEO of Apple, made the decision to share publicly and come out as gay.

Cook’s widely read op-ed in Bloomberg Businessweek was met with surprise because, to many, Mr. Cook had appeared to check all the boxes of the American CEO archetype. His disclosure and identity were greeted as groundbreaking — the CEO of Apple, then the most valuable company in the world, was gay.

Cook wrote that he came out publicly to benefit others, and at the sacrifice of the personal privacy he held so dear. He argued that his identity was a source of strength that made him even more effective in navigating the incredible complexity of growing a business. In closing the piece, he wrote: “We pave the sunlit path toward justice together, brick by brick. This is my brick.”

Abstract mural of woman

For years members of the LGBTQ+ community, particularly those of us in business and finance, have read and re-read his words, wondering why we kept our own journeys of self-discovery and acceptance walled off from our “professional selves.” One of us, William, came out midcareer while already in the financial services industry. Casual homophobia, and the related consequences of being perceived as “other,” were clear and present; so too was the resulting shame that goes with it.

As a mother of two young children early in her career, Megan would not have been able to remain closeted without spinning intricate fictions about a nonexistent husband and straight life. For her, being out was part of her reality, and a piece that she knew impacted people’s view of her, along with the misogyny and underestimation that she and so many have slogged through across the career span.

Cook argued that his identity was a source of strength that made him even more effective in navigating the incredible complexity of growing a business.

The thing is, like Cook, we two have been among the lucky ones.

Countless members of the LGBTQ+ community face systemic obstacles and significant differences that place them at an economic disadvantage. In several areas, including employment, inheritance, homeownership, and retirement, LGBTQ+ people are consistently at a relative disadvantage despite having, on average, higher educational attainment than those outside our communities.

Colorful Mural

When each of us went to start and grow our businesses, we were able to access capital. We could tap into our friends, family, and professional networks for what we needed, and establish and grow our businesses and our careers with relative ease.

Through research and outreach, we’ve learned that most LGBTQ+ founders frequently find themselves outside the circles of connection and acceptance, particularly among investors. The landscape for raising capital as an LGBTQ+ founder is fraught with barriers and radio silence, and the path to growth and success is often impeded when no investor steps forward to lead a funding round.

The two of us did not set out to make our mark as VCs. In fact, we came to this path as a result of our shared belief in systems-level change. When the challenge of lack of access to capital for LGBTQ+ founders became into focus, we quickly conducted a baseline study to truly understand and quantify the LGBTQ+ experience in venture funding. The results were stark and the need and opportunity were glaring. Against this backdrop, our determination to mobilize capital solidified into the launch of Colorful Capital, a VC firm focused on marshalling capital and resources to fill the gaps and invest in opportunities the mainstream capital market was leaving untouched.

The Journey is On sign

Colorful Capital is stepping forward into a small but determined community of support and belief in the talent and promise of LGBTQ+ founders. Nonprofits and communities like StartOut focus resources, opportunity, and mentorship for founders. Ben Stokes of Chasing Rainbows and the Gaingels network are emblematic of the growing push for increased capital flow in this space.

This work is bringing new meaning to “Pride” for both of us. As we reflect on the journey that brought us here, we take none of it for granted. We find inspiration in incredible entrepreneurs and, like Cook, we ground our purpose in knowing we have our own contributions to make across our LGBTQ+ community — contributions that will fuel the success of founders and the growth and scale of their ventures as they reach new heights.

Megan Kashner is Co-founder of Colorful Capital and a professor and Director of Social Impact at Northwestern University's Kellogg School of Management.
William Burckart is Co-founder of Colorful Capital and CEO of The Investment Integration Project, an applied research and consulting services firm that helps investors manage systemic societal and environmental risks. Mr. Burckart is also a fellow of the High Meadows Institute. He previously served as a visiting scholar to the ... Read more
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