Lab supports LGBT startups
StartOut accelerator offers advice, aid for entrepreneurs
The 16th floor of a bright office building in the heart of San Francisco’s bustling Financial District is not exactly where you would expect to find seven early-stage startups.
There are no beanbag chairs. No Foosball tables. No thematically named conference rooms or kitchens replete with kombucha and La Croix.
It looks like a law firm, all big windows and Bay Bridge views. But inside the offices are glimmers of something a little less buttoned-up.
Rainbow flags and decals. Posters bearing messages: “F— mediocrity” and “Get s— done.”
Nixon Peabody, a law firm with offices around the world, has transformed the lower level of its San Francisco office to a working space that’s part incubator and part laboratory, focused on advancing and supporting startups led by LGBTQ founders.
The accelerator, called the StartOut
Growth Lab, is the brainchild of Thomas Gaynor, the managing partner of Nixon Peabody’s San Francisco office, and Andres Wydler, the executive director of StartOut, the largest nonprofit organization for entrepreneurs in the lesbian, gay, bisexual, transgender and queer community.
The idea stemmed from a conversation they were having in the fall about economic inequality among LGBTQ individuals, who, though more likely to be better educated than the general population, also make less money on average than their heterosexual or non-transgender counterparts, research has shown.
The GrowthLab, which opened its doors to its first cohort of seven companies in March, said the goal is to set up the companies who go through its six-month program with enough knowledge and connections to ensure that they get the funding and support they need to move forward.
“Finding a true sense of economic empowerment is the natural next step from the political progress we’ve made in the last two decades,” Gaynor said. “Access to funding, being taken seriously by reputed capital on the basis of the product you have to offer for the entire community without being considered a sideshow, without being seen as fringe — that is, I think, the ultimate goal.”
Gay men earn up to 32 percent less than heterosexual men with similar qualifications, according to information collected by the American Psychological Association , and up to 64 percent of transgender people earn less than $25,000 per year.
At tech firms, LBGTQ employees are the group most likely to be bullied, publicly humiliated or embarrassed, according to a survey conducted this year by Harris Poll for Oakland’s Kapor Center for Social Impact.
Wydler calls it the “tax on being LGBTQ.”
“If you’re female, if you’re a person of color, it gets worse,” he said.
This tax may also be costing companies: a significant number of LGBTQ employees left tech jobs due to mistreatment or unfairness, according to the Kapor Center study, which sought to understand why people of color, women and LGBTQ people are leaving tech companies in droves.
More than 80 percent of LGBTQ people surveyed reported “some form of unfairness” in their workplace, and nearly a quarter said they had been subject to public humiliation.
They were less likely to leave because they had a better opportunity waiting for them than respondents from other groups.
“A lot of gay entrepreneurs find it hard to fit into a standard corporate culture,” said Peter Sisson, GrowthLab’s entrepreneur in residence and founder of augmented reality startup AreaLive. “We’re driven by a sense of not fitting in, so we create our own companies that fit us and mirror the world we want to live in.”
At the GrowthLab, being queer or transgender or gender-nonconforming (those who don’t neatly identify as male or female) isn’t an anomaly. It’s the norm. In fact, it’s the price of admission.
That alone makes a difference, Wydler said.
As founders take up residence in the GrowthLab, they’ll be coached, mentored and tasked with creating an aggressive growth plan for their companies, then pushed to attract funding and check off their goals. The accelerator is “age agnostic, industry agnostic” and prizes racial, ethnic and gender diversity, Wydler said.
The program comes at no cost to participating companies. Some incubators charge service fees or take an equity stake in companies, or both.
“The idea is to re-create the best of what Silicon Valley has to offer, which is a mindset and ecosystem,” Gaynor said. “To create a hospitable, collegial, collaborative home that supports the LGBTQ entrepreneur to be successful without any of the hindrance that usually comes in the form of the LGBTQ tax or discrimination.”
“Our community needs to be successful to benefit society as a whole,” Wydler added. “We’re not here to support our community for our community only. We’re not building a parallel economy, we just want equal opportunities.”
In 2010, the law firm began urging all of its attorneys around the world to put in at least 40 billable hours of work a year on activities explicitly related to diversity and inclusion efforts, or how the firm recruits, retains and mentors lawyers who are women, racial minorities or LGBTQ.
Though this is separate from that effort, Gaynor said the firm sees it as another
way to give back to the community, not as a “client generator.”
Having the support of a big-name law firm like Nixon Peabody lends StartOut and its accelerator credibility, Wydler said.
“It’s a subversive act,” Wydler said. “We’re trying to build companies so successful that (investors) are forced to support them because the companies are so much better than the alternative. It’s a very high bar, but unfortunately that’s what diverse groups need to deal with.”