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Study: LGBT Startups, Entrepreneurs at Risk for Discrimination

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New York is one of the states benefiting as entrepreneurs leave states with policies unfriendly to the LGBT community. Photo credit: Death to Stock Photography

Startups founded by lesbian, gay, bisexual and transgender (LGBT) entrepreneurs are at risk for discrimination — affecting how they build trust with investors, where they locate their businesses and their ability to raise capital — according to a study from StartOut, a national non-profit organization that supports, educates and connects the LGBT entrepreneurship community.

This is the first study of its kind to shed light on the experiences of LGBT founders of high-growth companies. Combining quantitative and qualitative research methods, the study analyzes a survey of 140 LGBT entrepreneurs, a big-data set of more than 100,000 straight and LGBT founders and extended interviews intended to capture the personal stories of LGBT founders.

“By leveraging massive online datasets, we can clearly see the profoundly negative impact of discrimination on job creation, and the unintended boon it provides states like California and New York,” according to Vivienne Ming, StartOut’s Vice Chair and Socos Co-founder.

According to the study, Texas lost half of its future entrepreneurs with only one returning to operate his business in Austin, Texas. Texas represented the third largest sample of entrepreneurs in the study, with 8%, behind California (31%) and New York (29%). Seven of the eleven companies in the study’s sample from Texas, or 64%, are located in Austin.

KEY FINDINGS

Authenticity and Trust is Lacking in Key Relationships
37 percent of LGBT entrepreneurs funded or seeking funding are not “out” to investors. When asked why, nearly half said it was not relevant, and 12 percent thought it would hurt them. All investors interviewed said good personal rapport was critical to strong business relationships.

Jobs are Leaving “Discriminatory” States
From 2005 to 2014 more than 1 million jobs created by LGBT entrepreneurs left discriminatory states in favor of inclusive states. Of those, 78 percent moved to California, New York and Illinois. States with policies unfriendly to the LGBT community lose many if not all of their nascent growth entrepreneurs.

Lesbian Entrepreneurs are at a Distinct Disadvantage
12 percent of companies owned by GBT men have revenues of more than $5 million compared to 3 percent of LBT women. Meanwhile, 70 percent of female LBT founders raised less than $750,000 in funding compared to 47 percent of male GBT founders who raised more than $2 million.

“It seems politically correct to say that whom one happens to love is not relevant in business, but our research shows otherwise,” said University of Chicago Booth School of Business Clinical Professor Waverly Deutsch. “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.”

The study was conducted by University of Chicago Booth School of Business Clinical Professor Waverly Deutsch, a member of StartOut; StartOut Vice Chair, Vivienne Ming; Chicago Booth Adjunct Professor of Marketing and StartOut board member, Mary Shea; and StartOut board member and Chair Emeritus, Chris Sinton. It marks StartOut’s first step in its ongoing research program aimed at painting a clearer picture of the state of LGBT entrepreneurship in the U.S. This initial study was sponsored by Credit Suisse with support from Booth’s Polsky Center for Entrepreneurship and Innovation.

“Economic equality is a critical step along the continuum of progress for LGBT people,” says StartOut’s Executive Director Andres Wydler. “Over the next few years, we will offer policy makers and business leaders the data and evidence they need to more fully understand the LGBT entrepreneurial experience.”

Chase is the Founder and Creative Director of therepubliq.com, Host and Executive Producer of OutCast Austin, an award-winning LGBT weekly radio program on KOOP 91.7 FM in Austin. In 2011, he was named the Critics Pick for 'Most Gaybiquitous' in the Austin Chronicle's Best of Austin. In 2012, CultureMap Austin named him one of Austin's Top LGBT bloggers and he received the AGLCC's Chamber Award for Social Media Diva.

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Business

Austin LGBT Chamber Raises Fees for Small Business Members

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ALGBTCC Rainbow Ribbon Cutting for BizBox Powered by Office Depot
The Rainbow Ribbon cutting for BizBox Powered by Office Depot at the Austin LGBT Chamber May Luncheon. Photo credit: Austin LGBT Chamber of Commerce / Facebook

The Austin LGBT Chamber of Commerce‘s Board of Directors has voted to approve a restructure of its membership fees for 2019. Starting January 1, 2019, the Enhanced Small Business Member level will be eliminated and the fee for the Basic Small Business Member level will increase from $250 to $365 per year.

When their current membership expires, current Enhanced Small Business Members will have the option to upgrade their membership to the Corporate Silver Partner level for $1,000 or downgrade their membership to the Basic Small Business Member level at $365.

There were no changes to the membership fees for Student, Individual or Non-Profit Organization member levels or the Corporate Partner levels.

Austin LGBT Chamber of Commerce
2019 Membership Levels

Student – $25
Individual – $75
Basic Small Business – $250 $365
Enhanced Small Business – $450
Corporate Silver Partner – $1,000
Corporate Gold Partner – $2,000
Corporate Platinum Partner – $3,500
Corporate Titanium Partner- $5,000

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Workplace

Transgender Americans Still Face Workplace Discrimination Despite Some Progress

While US companies have made significant strides in creating workplaces that are more inclusive of transgender individuals, discrimination and employment penalties remain.

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This article is republished from The Conversation under a CC BY-ND 4.0 license. Read the original article.

Activist Gwendolyn Ann Smith founded Transgender Day of Remembrance on November 20 to honor the memory of those whose lives were lost due to trans prejudice and hatred.

In that spirit of reflection, the day serves as an opportune time to examine how the opportunities and experiences of transgender individuals in the workplace have changed – particularly at a time when some government officials are openly advocating policies that discriminate against them.

I’ve been researching diversity and inclusion in a variety of settings including sports and work for nearly two decades. The good news is that my work and that of my peers shows transgender individuals have made significant strides in the workplace. The bad news is that many hurdles remain to equal opportunity and an end to discrimination.

SIGNS OF PROGRESS

Various indicators and signs point to meaningful improvements in the access, treatment and opportunities for transgender employees.

One such indicator is the Human Rights Campaign’s Corporate Equality Index, an annual assessment of policies and benefits for LGBT individuals in Fortune 500 companies. In 2002, only 3 percent of Fortune 500 companies had nondiscrimination polices based on gender identity. That figure was 83 percent in the most recent report, which came out in 2018.

Human Rights Campaign 2016 Corporate Equality Index Best Places to Work Reception / photo credit: Ted Eytan / Flickr (CC BY-SA 2.0)

The report also shows that most Fortune 500 companies now include transgender-inclusive medical benefits. In 2002, no companies offered such provisions.

Another measure of how much things have changed is in the willingness of corporate giants and their CEOs to oppose policies that discriminate against trandsgender individuals.

A recent example is when President Donald Trump said he would seek to legally define gender as immutably male or female. Coca-Cola, Apple, JP Morgan Chase and dozens of other major U.S. companies swiftly signaled their opposition.

Another is the backlash that has followed legislative efforts to limit the rights of transgender individuals to use pubic restrooms. North Carolina, for example, was estimated to lose US$3.76 billion over a dozen years after companies nixed plans to build facilities in the state or canceled concerts because of the “bathroom bill” lawmakers passed. They later repealed it.

My own research with a colleague shows why corporate America is taking a stand: Most consumers value inclusiveness. Participants in a study we conducted in 2014 interpreted LGBT-inclusive statements by organizations as a signal that the company valued all forms of diversity. As a result, the consumers’ attraction to the organization increased.

HURDLES REMAIN

Despite the progress, hurdles still exist, impeding full trans inclusion in the workplace.

A study I conducted with another colleague in 2017, for example, showed that, although attitudes toward transgender individuals have improved over time, they still lag behind perceptions toward lesbian, gay and bisexual individuals.

Legal scholars from UCLA’s Williams Institute have shown that transgender people earn less and are more likely to be unemployed than their cisgender peers – whose gender corresponds to their birth sex. In fact, in 2011, one in seven transgender individuals earned $10,000 or less a year, while the unemployment rate for trans people of color was nearly four times the national rate.

For those who are employed, they routinely face discrimination. In another study out of the Williams Institute, state law and policy director Christy Mallory and colleagues found that more than one in four reported being fired, passed over for promotion or not being hired in the past year because of their gender identity and expression.

Others are aware of the mistreatment. In a survey of Texans – a state where employment discrimination against transgender individuals is legal – 79 percent of the respondents agreed that LGBT individuals face workplace discrimination.

Texans are not alone. According to the Movement Advancement Project, an organization whose mission is to promote equality for all, 48 percent of LGBT individuals live in states lacking employment protections based on sexual orientation or gender identity.

MORE INCLUSIVE WORKPLACES

The evidence suggests transgender individuals have made progress in the workplace, but they still face considerable barriers. What, then, can employers do to create more inclusive environments?

Legal protections are key. Organizational psychologists Laura Barron and Michelle Hebl have shown that the presence of anti-discrimination ordinances and laws decrease bias in employment decision making. Absent federal protections, states and cities can ensure all people have employment protections, irrespective of their gender identity and expression.

Organizational leaders also make a difference. My research shows that leader advocacy and role modeling are critical when creating and sustaining an inclusion culture. Apple CEO Tim Cook, for example, has a history of strongly advocating for LGBT rights. It is little wonder, then, that Apple is routinely listed among the most LGBT-friendly companies.

The Apple contingent in the 2014 Austin Pride Parade / photo credit: Chase Martin / therepubliq

Finally, co-workers play an important role, especially when they serve as allies. These are persons who advocate for transgender equality in the workplace and try to create welcoming, inclusive spaces. Allies seek to create social change, leading the charge at times and supporting their transgender colleagues in other instances.

Transgender inclusion helps all involved. Employee engagement and performance improves, as does their psychological and physical health. Diverse and inclusive organizations outperform their peers on objective measures of success, such as stock market performance.

Thus, the path forward – one that clears the hurdles in place and creates an inclusive environment – is one that can benefit everyone.

Disclosure: Texas A&M University provides funding as a founding partner of The Conversation US. A complete list of partners and funders can be viewed here.

The Conversation is an independent, nonprofit publisher of commentary and analysis, authored by academics and edited by journalists for the general public.

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Out Leadership Rings the Nasdaq Opening Bell

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Out Leadership, the global LGBT+ business network, rang the Nasdaq stock market opening bell on Friday, November 2, 2018. The ceremony celebrated Out Leadership’s instrumental impact in making LGBT+ equality a priority in global C-suites, and the progress its executive events and talent initiatives have made towards inspiring Out Leaders and global companies to grow their businesses through inclusion.

Todd Sears (center) was joined by members of Out Leadership’s senior leadership team and representatives from member companies / photo credit: Out Leadership / Facebook

“When I started this company, it was rare to see a CEO discussing LGBT+ equality as an issue that affected how they did business. In the last 8 years, we’ve engaged more than 400 global CEOs in our work, helping them realize the immense positive business impacts of inclusion. In many ways, ringing the opening bell is symbolic of the immense progress we’ve made in establishing LGBT+ equality as a guiding principle for many of our world’s most influential companies. As we ring the opening bell, we are grateful to the many companies and leaders who’ve helped us get here. And we are also reminded of how much potential remains locked behind closet doors. Our commitment to driving LGBT+ equality forward, in every kind of company, and in every region of the world, is stronger than ever before,” said Todd Sears, Founder and Principal, Out Leadership.

Todd Sears was joined by members of Out Leadership’s senior leadership team, representatives from Out Leadership’s member companies include members of its Leadership Committees, and other supporters.

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