Although LGBTQ2S+-owned businesses in Canada earned over $22 billion in 2019 alone, only 1% of the country’s $18 billion annual venture fund is allocated to LGBTQ2S+-led businesses annually. In Canada, 2SLGBTQ+ individuals own 1 in every 40 businesses; despite these economic contributions, LGBTQ+ entrepreneurs continue to struggle disproportionately to their hetero peers.
In response to this gap, Investment groups, nonprofits, and government entities across Canada have increased the resources available to LGBTQ+ entrepreneurs, providing funding opportunities, leadership programs, access to tech, networking, and other resources at low or no-cost to queer startup owners.
The state of funding for LGBTQ+ entrepreneurs
According to the 2019 CGLCC and Neilsen report, 35% of LGBTQ2S+ entrepreneurs surveyed said that they feel the need to hide their sexual orientation in order to secure funding, and 47% of LGBTQ2S+ entrepreneurs said their queerness was a real barrier in obtaining funding.
This aligns with the problem of “pattern-matching” in venture capitalism, where investors look for replicas of firms and leaders that have been successful in the past. This means that minority-led businesses like those headed by LGBTQ+ owners face an immediate and often insurmountable barrier when seeking funding from a pool of investors that is statistically likely to be white, straight, cisgender, and male.
A similarly outdated line of thought among the VC community that impacts queer founders is the idea that few non-white, queer, nonbinary, female or otherwise marginalized CEOs or startup founders exist, and don’t question any inequitable distribution of their funds.
Funding can be even harder to secure for entrepreneurs who are neither white or nor male. Bobbie Racette, founder and CEO of Calgary startup Virtual Gurus, spoke with Reuters about her own difficulty finding support with the angel investor crowd—largely because she is queer, female, and Indigenous.
Today, Canada’s LGBTQ+-owned start-ups see success
Despite the many obstacles she faced, Racette and Virtual Gurus ended up raising around CAD $1.2 million in startup funding from a like-minded venture capitalist. Earlier this year, the Calgary-based virtual assistance agency completed a successful Series A round of funding, ultimately amassing CAD$8.4 million in support.
Some of these funding success stories are thanks in part to Gaingels, a New York-based investment group that specifically funds LGBT+ or LGBT+-friendly business endeavors. In 2019, Gaingels expanded their investments into Canada—their contributions tend to provide payouts of $100K-$500K, often enough for startups to get on their feet. The firm also offers mentorship expert advising, and networking opportunities for queer business founders.
Perhaps the most notable Canadian Gaingels investment came in the form of a $360K deal with Borrowell, a queer-friendly FinTech startup that uses AI to give free credit checks to its users.
Some other notable funding sources for LGBTQ+ businesses include:
Backstage Capital provides funding for LGBTQ+-led, female-led, and minority-led ventures.
Pipeline Angels offers funding for non-male entrepreneurs whose ventures are sustainable and community focused.
Startup Resources for LGBTQ+ entrepreneurs and businesses
One of Prime Minister Trudeau’s 2022 re-election promises is to “provide $40 million over 4 years starting in 2021-2022 for capacity funding to Canadian LGBTQ2 service organizations”. This funding is part of a federal LGBTQ2S+ action plan he has developed.
The Canadian Tourism board earmarked over $300K from the Tourism Relief Fund exclusively for queer tourism efforts in Atlantic Canada. The allotment will start the “LGBT+ Tourism Market Readiness Program,” which will focus on developing the queer tourism industry of the region by supporting LGBTQ+ entrepreneurs in tourism.
Outside of government help, dedicated programs like Venture Outand StartProud.org aim specifically to connect Canadian venture capitalists with queer-led startups in search of funding. Organizations like QueerTech and LOUD Business help further connect queer business leaders with the ever-growing, capable, and competent queer workforce in Canada, as well as with individuals who can otherwise help bolster their business endeavors. Pride At Work empowers queer workers with resources and support to help tackle discrimination in their respective workplaces.
Programs aimed at helping LGBTQ+ business students are also growing. The Canadian LGBT+ Chamber of Commerce has partnered with Carleton University’s Sprott School of Business and Innovation Hub to create a dedicated incubation program for queer businesses. This year at the University of Toronto, entrepreneurial students pitched their business ideas in the PRIDE Pitch competition for various cash prizes.
Other helpful networking groups for LGBTQ+ business leaders include:
LOUD Business is a coalition of queer and queer-friendly businesses and professionals dedicated to amplifying the LGBTQ+ business community and providing greater opportunities.
QueerTech’s mission is to break down barriers within the tech industry in Canada, and works to provide resources, opportunities, and even creative spaces to tech-savvy queer business leaders and workers.
Start Out focuses on growing interest in business endeavors among Canadian LGBTQ+ youth and provides scholarships and mentorship programs to help further their careers.