How LGBTQ Entrepreneurs Are Getting Shortchanged

Although it's well established that women and minorities experience a number of disadvantages at work, fewer conversations have been devoted specifically to LGBTQ discrimination in the workplace. But according to a new study from the non-profit StartOut, it's a very real issue — and one that deserves attention. After all, by being inclusive, businesses help not only their employees but also themselves.

StartOut analyzed surveys of 140 LGBTQ entrepreneurs, data from over 100,000 founders of companies, and additional interviews with LGBTQ founders. 37 percent of the founders hadn't come out to their investors. Half of them said their sexual orientation didn't come up because it simply wasn't relevant. However, they all believed having a personal relationship with investors — which may include discussing matters of identity — was important, and 12 percent believed that if investors knew they were LGBTQ, it could hurt their chances at receiving funding and support.

When you look at public opinion on LGBTQ rights, it's easy to see why the subjects of the study might have this fear. 58 percent of LGBTQ Americans have been the targets of jokes or slurs and 21 percent have been treated unfairly by employers, according to a 2013 Pew Research poll. And a third of Americans still think it's immoral to be transgender, according to a YouGov survey from 2015.

StartOut also found that, as usual, women have it worse. Companies owned by LGBTQ women bring in less revenue than those owned by LGBTQ men and raise fewer funds. This occurs despite numerous studies showing that having women as leaders actually benefits businesses. The issue is sexism, not inferior abilities.

In addition to experiencing a lack of acceptance, many LGBTQ people remain unprotected by the law. According to the ACLU, only 19 states and the District of Columbia legally ban discrimination based on sexual orientation or gender identity. StartOut's study found that LGBTQ people are moving away from these states. In fact, they estimate that such states have lost over one million jobs due to this migration. This is yet one more reason why inclusive policies benefit companies and the economy, not just marginalized employees.

StartOut Executive Director Andres Wydler pointed out in a press release that since economic inequality contributes to so many other forms of inequality for LGBTQ people, addressing workplace discrimination should be a priority.

“It seems politically correct to say that whom one happens to love is not relevant in business, but our research shows otherwise,” added University of Chicago Booth School of Business Clinical Professor Waverly Deutsch, an author of the study. “LGBT entrepreneurs specifically choose diversity-friendly states to start their companies; raise less capital than their straight counterparts and have to balance the risk of homophobia and discrimination with creating authentic relationships with investors, customers and partners.”

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