Diversity and inclusion are at the forefront of everyone’s mind in the business world today, especially during Pride Month. But surprisingly, venture capital, grants, and networking opportunities aimed specifically at LGBTQ+ small business owners and entrepreneurs can still be difficult to find. As a result, LGBTQ+ business owners still face many obstacles when applying for loans, venture capital, and other financial resources to drive growth.
According to the National Gay and Lesbian Alliance Chamber of Commerce (NGLCC), over 1.4 million businesses are owned by LGBTQ+ individuals in the United States. These businesses contribute more than $1.7 trillion annually to the economy. Therefore, it can be argued greater efforts should be made to distribute funds to LGBT+-owned businesses so they can continue to grow and thrive — especially in the wake of the COVID pandemic and the turmoil it brought to the business world.
In 2021, the NGLCC asked LGBTQ+ businesses how they were coping with the pandemic for the second year in a row. According to the LGBTQ Small Business Owner Financial Health Survey, almost a third of LGBTQ+ small business owners lost 50% of their business directly due to COVID.
What’s more, the survey revealed that many LGBTQ+ business owners are having problems accessing funds that should be available to them. Although 36% of LGBTQ+ small business owners were able to take out Economic Injury Disaster Loan (EIDL) or Paycheck Protection Program (PPP) loans during the pandemic, nearly the same number (35%) said they couldn’t access any of these funds. And 28% of them said although they were able to get loans, the money was not as much as they needed.
However, the good news is that approximately 80% of LGBTQ+ small businesses expect to make a full recovery this year.
Resources to grow your business
While government support for LGBTQ+ people lags behind that for women and minorities, a number of private organizations have made great strides in LGBTQ+ business advocacy. In this article, we’ve put together a list of the five top resources every LGBTQ+ business owner should know about.
Note that although many more groups and associations exist to help the LGBTQ+ community with broad social equity and equality initiatives, we’ve focused on here on business-centric resources aimed at for-profit companies.
1. The Small Business Association (SBA) Network for LGBTQ+ Businesses
SBA’s Network for LGBTQ+ Businesses focuses on helping LGBTQ+ business owners gain access to all the programs the SBA offers. Training and free technical assistance to help LGBTQ+-owned businesses gain traction with federal contractors are some of its most valuable resources. The network also makes a special effort to assist owners in gaining access to the SBA 8(a) Business Development program. SBA (8a) is an ownership/diversity certification that includes a nine-year package of business training, counseling, marketing, and technical assistance for small businesses with diverse ownership.
Becoming certified as an 8(a) firm can make a major difference for small businesses, as there is a current mandate for 24 major federal buying agencies to award 5% of prime contracts to small, disadvantaged businesses. Many of the businesses winning these contracts are 8(a) firms.
2. National Gay and Lesbian Chamber of Congress
The NGLCC is an advocacy group with 76 affiliate chambers currently active around the world. Founded in 2002, it has earned the title of the “business voice of the LGBTQA+ community.” It has 399 corporate sponsors, including IBM, Ernst & Young, American Express, Intel, Motorola, and American Airlines.
The NGLCC has recognized 1,830 businesses as “Certified LGBT Business Enterprises” through its certification program. This is one of the NGLCC’s most valuable services offered to the LGBTQ+ business community. With certification, LGBTQ+ companies get a marketing leg up to differentiate themselves from competitors. They also join a special group of businesses who are eligible for contracts in the large supply chains of the almost-400 corporate sponsors.
NGLCC certification also opens up opportunities for mentorship, corporate partnerships, matchmaking events, webinars, business development tools, leadership training, executive education, and corporate scholarships. If certified, a business is also placed in the NGLCC database, which enables corporations to search for LGBTQ+ firms they can contract with.
The NGLCC’s annual National Business & Leadership Conference brings together certified LGBTQ-suppliers with business leaders in corporate America as well as in government. The event enables certified firms to make important connections with other LGBTQ+ businesses and allies, and to network for potentially lucrative contracts.
StartOut is another important player in the business community for accelerating the economic empowerment of LGBTQ+ businesses. Since its founding in 2009, StartOut has been working to create a level playing field for LGBTQ+ businesses.
StartOut’s mission is to help LGBTQ+ entrepreneurs lead, succeed, and shape the workforce of the future. They achieve this through educational events, networking, and mentoring. They fight discrimination through promoting LGBTQ+ entrepreneurs in the international media. It’s free to join the StartOut network, where businesses have access to events around the country that encourage connections and networking between LGBTQ+ owners and entrepreneurs.
4. Backstage Capital
Spotlighting that less than 10% of all venture capital funds go to startups with women, people of color, and LGBTQ+ founders, Backstage Capital set out to change that. Founded in 2015, Backstage Capital has invested over $15M in more than 170 companies led by underrepresented founders, making it a great resource to connect with people who might invest in your LGBTQ+ business. As a venture capital fund, Backstage Capital seeks highly scalable companies capable of returning an investment ten times over, with the market potential of $1 billion. It invests in pre-seed to Series A rounds primarily with investments of $100,000, although sometimes in later-stage startups as well.
Gaingels’s mission is to add more C-suite LGBTQ+ executives into prominent roles across all industry segments. They achieve this by investing in businesses founded by LGBTQ+ individuals. Founded in 2015, Gaingels has invested more than $20 million in LGBT+ companies thus far.
Gaingels is one of the leading LGBTQ+ investment syndicates in the world and one of the largest private investors in North America. By partnering with other venture organizations, they actively seek out startups with strong missions that are competitive in four out of five criteria:
- Founder experience
- Market size
- Investor leadership
- Deal terms
The Gaingels syndicate currently has more than 2,000 accredited investors interested in helping diversify the venture capital ecosystem while seeking extraordinary returns by investing in what it calls “the most exciting companies within the innovation economy.” Gaingels asks syndicate members to go above and beyond simply making cash for their portfolio companies. This includes making introductions, giving advice, forging business connections, and otherwise engaging with LGBTQ+ business owners in meaningful ways.
Gaingels has rigorous standards for their portfolio investments, so they recommend interested LGBTQ+ firms “do their homework” before contacting them. They’re currently actively seeking investment targets and encourage qualified firms to set up meetings or send in videos.
How to support LGBTQ+ people within your small business
To aid your own LGBTQ+ workers in advancing their careers, you can recommend they join OutProfessionals, a LGBTQ+ business networking organization. It includes business and membership directories, a list of B2B network groups, job listings, and regular event postings.
You can also consider joining Open For Business, which was founded as an informal coalition of businesses — including some of the world’s largest companies, like Google and IBM — to perform research that makes an economic case for LGBTQ+ inclusion and the business risks of discriminating against LGBTQ+ individuals in the workplace. Open for Business’s research shows LGBTQ+ -inclusive companies attract and retain talent, innovate, and build customer loyalty and brand strength at a higher rate than companies that do not have inclusive practices.
When you consider four out of 10 LGBTQ+ employees are closeted at work, and 75% have reported experiencing negative day-to-day workplace interactions related to their LGBTQ+ identity in the past year, you can see why organizations such as the ones we’ve covered continue to be essential. So, remember that as a business owner, it’s your responsibility to ensure their facility is a safe, inclusive place where LGBTQ+ people can thrive.
Forbes named CenturyLink’s parent company, Lumen Technologies as one of America’s Best Employers for Diversity in 2021. Learn more about what we’re doing to make our workplace more diverse here.