Gaingels, which currently operates in North America and the UK, was founded in 2014 as a means of offering investment to companies operated by gay, lesbian, bisexual or transgender leaders who feel that their sexuality or gender could inhibit their ability to raise capital.
According to the group, founded by David Beatty and Paul Grossinger, “LGBT founders have been shown to face discrimination and are less likely to receive funding”.
They pointed to a 2016 study of US entrepreneurs by Startout, suggesting that more than one in 10 (12 per cent) believed being out to investors would directly hurt their chances of securing investment, while more than a third (37 per cent) hide their sexuality from investors for various reasons, including many who feel it is simply not relevant.
But it has been of relevance to Troy Douglas (pictured), co-founder of sugar-free beverages company Nexba, who has just secured a $150,000 investment from Gaingels as part of a $6 million series A capital raising.
“As an openly gay founder in a family-first business, I’m aware of how fortunate I’ve been to have the support of my business partner and brother-in-law, Drew Bilbe. That said, I will always be thankful to groups like Gaingels who lead the way by encouraging each of us to feel safe and proud of who we are,” Mr Douglas said.
Asked to expand on his personal experience, Mr Douglas said that “while my personal experience has been a positive one, hearing the stats that 37 per cent of founders are not “out” and a further 12 per cent have a perception that it will hurt them is why I believe in sharing and being proud that Nexba is Gaingels backed.”
He continued: “Your sexual preference is not your personal leading bi-line or opener - nor should it ever be. In a pure transactional business and investment-raising sense, it should not be your lead driver.
“I have been encouraged by individuals who have led the way with public profiles to owning being comfortable with my sense of self. Owning who you are is your greatest defence against discrimination and homophobia. What organisations like Gaingels and the superstar leaders like [Qantas CEO] Alan Joyce and [former David Jones executive] Paul Zahra as business icons have done is tell everyone that you don’t need to hide.
“Sure we may get a pie to the face, but ultimately that is through ignorance, not strength, and your integrity and authenticity in who you are will be what ultimately drives your greatest growth in life - personally and professionally.”
According to its website, Nexba was founded by the relatives and “besties” in 2010, and has gone on to be stocked in 3,000 stores Australia-wide, including Coles and Woolworths, as well as in UK supermarket chain Sainsbury’s.
“Capital raising is an intense experience, but it has transitioned Nexba from being a start-up to a scale-up,” Mr Douglas said.
“I’m honoured that Nexba is Gaingels’ first Aussie investment.”
Commenting on its investment contribution in Nexba, Gaingels’ Mr Grossinger said: “We believe in the company’s leadership, and that its brand and proprietary product range will continue to translate in Australia and beyond.
“Gaingels backs companies with LGBT leadership, such as Troy and Nexba, because we believe that diverse leadership correlates with stronger culture, better opportunities for more LGBT senior leadership at the company and, ultimately, stronger performance. We look forward to helping Nexba scale towards its ultimate potential.”
To date, Gaingels has directly invested over $10 million, and led $25 million worth of investment, into 32 separate companies and eight venture capital funds.