It's likely well-known within the scene that there are already some European venture capital firms like Auxxo from Berlin, F and F from Austria, or Sista from France, which specifically invest in female founders. However, the emergence of Identity.vc in Europe, specifically targeting LGBTQ+ founders and entrepreneurs, is something new in Europe.

At least, that's what co-founding partner Til Klein, a former Boston Consulting Partner and fintech entrepreneur, suggests. „A few years ago, we came across the investment syndicate Gaingels in the US, which invests in LGBTQ+ founders", explains Klein, who launched the 50 million euro fund together with family office investor Jochen Beutgen. „With assets under management of over 800 million dollars and over 70 unicorns in the portfolio, Gaingels has been extraordinarily successful. We wondered why there wasn't such an initiative in Europe at that time. After a few years, we decided to do it ourselves.“

Identity.vc recently announced its first closing. The fund invests in early-stage startups (from pre-seed to series A phase) primarily located in Europe and led by founders or top executives from the LGBTQ+ community.

This focus is one of many diversity aspects, but Klein believes it holds potential. „There are many studies showing that diversity drives performance," he said.. "At the same time, many LGBTQ+ founders believe they have to hide their sexual orientation from investors. But we believe that this creates a disadvantage because it unnecessarily drains founders energy, which they need to focus on the essentials. Moreover, it is not a good basis for a trusting relationship between founders and investors.“

According to Identity.vc, approximately 15% of all startups now have an LGBTQ+ co-founder, according to estimates. A survey conducted last year in the UK by the investor collective Proud Ventures among over 100 LGBTQ+ founders revealed that 75% hide their sexual orientation and identity from investors to some extent. Research indicates that such behaviour negatively affects the physical and mental health of individuals.

Identity.vc has so far invested in four startups, including the Berlin-based AI company Frontnow. Klein mentions significant interest in the startup scene: „Just by announcing the launch of the fund last week, we received an incredible number of inquiries and were welcomed everywhere with open arms," he said. "Founders want us as investors to represent diversity and gain better access to the LGBTQ+ startup community.“

Klein further notes that not only founders but also investors are increasingly engaging with the topic. A survey by Morgan Stanley among 1,000 US investors, which was published in 2023, showed that 45% of respondents were interested in investment products that promote the equality and integration of the LGBTQ+ community. Interest was particularly strong among younger investors.

„Our investors are very grateful to have the opportunity to invest in LGBTQ+ founders now", he says. "The venture capital scene is still very traditionally oriented. Many are now aware that this needs to change. The venture capital industry urgently needs a cultural shift towards more diversity and inclusion.“