When Til Klein and Jochen Beutgen met Gaingels, the US-based angel investor syndicate that supports LGBTQ+ founders, they wondered why there wasn’t a company that wanted to do the same for the European LGBTQ+ startup community. Five years later, when such a company did not yet exist, Klein and Beutgen decided to try to start one themselves.
In 2023, the couple launched Identity.vc, a venture capital firm that invests in early-stage companies with at least one founder or executive who identifies as a member of the LGBTQ+ community. The Berlin-based company is currently raising €50 million for its debut and has so far closed with €15 million. The founding partners also hired Mari Luukkainen, who has previous operating and investment experience, as a principal.
The firm writes checks ranging from €250,000 to €1.5 million to companies from pre-seed stages to Series A. The firm is industry agnostic and invests in Europe and beyond. Identity.vc has backed four companies so far, including eco.mio, a software plugin that helps companies manage the environmental impact of business travel, and Paxton, a legal AI technology company.
“The majority of LGBTQ+ founders: They don’t pitch to their investors because they think that could be a disadvantage,” Klein told TechCrunch. “We think it’s a big mistake and [that means] you don’t have that relationship of trust with your investors. Investors they don’t like, you don’t want them at your table. You should be able to be yourself.”
Klein said they’ve gotten a lot of positive feedback on the strategy, and raising money hasn’t been too difficult so far. He added that LPs are looking for funds that give them that kind of diversification. He cited a recent Morgan Stanley survey that found 45% of US investors were is looking to find a way to support LGBTQ+ founders.
Not surprisingly, investors see value in supporting diverse groups — many studies have shown that diverse teams outperform non-diverse teams — but it’s still refreshing to see that LPs and the European startup community have embraced the company. Identity.vc’s narrative is a bright spot at a time when some companies focused on investing in diverse founders have struggled to scale their U.S. operations and others have faced legal pressure on their thesis.
“So far it has been very supportive from investors and other VCs. They love working with us and our experience,” Klein said. “When I talk to regular funds, they also know they need to be more diverse. They see us as an opportunity to increase their diversity. We have not yet experienced this reaction, perhaps because Europe is much more advanced in investing in diversity.”
While the company was inspired by Gaingels, Klein said they intentionally decided to do things a little differently. He said they wanted to raise a traditional fund, as opposed to a syndicate, so that it would facilitate follow-on investments.
The capital size was also intentional. While some recommended starting the company with a smaller capital, say €20 million, Klein said they didn’t want to do that. They wanted a bigger debut fund to make a statement about how serious they were about the opportunity. Klein added that they wanted to collect a high management fee as well, so that they would have enough capital to start building the European community for LGBTQ+ founders and investors.
“In the US, there’s a real LGBTQ+ investor community — that’s not the case in Europe,” Klein said. “We need to have resources and people who can do community work.”
The company started a Slack channel for the community, which currently has 300 members. The company has also held events in Madrid, Amsterdam and Paris to create spaces where LGBTQ+ founders and investors can meet and connect with each other. He said these initiatives not only help his company build community, but can also help flow deals for Identity.vc and help startups find other sources of capital.
“We’re going to bring the local community together, and you’d be surprised how few LGBTQ+ founders and investors are connected,” Klein said. “We could create value by bringing local people together. If there’s an early-stage startup that’s too early for us and an angel investor, I can bring them together.”
The company has only raised 30% of its capital goal so far, but it’s already starting to make a difference — something that will continue to grow as the company brings in more capital.
“There are a lot of reasons why we think it’s necessary,” Klein said of Identity.vc’s existence. “We strongly believe that we can overcome due to the fact that our diversity-driven performance and support of the LGBTQ+ community gives us unique access to startups and access to interesting offers.”
