January 20, 2015
For decades affinity groups have played an important role in business. Many Fortune 500 Companies have made diversity and inclusion a priority both internally with employees and externally when they select partners and service providers.
In the small business sector and for startups specifically, the rising tide of diversity and inclusion is beginning to make an impact with the emergence angel networks and funds focused on diverse founder led businesses. This includes groups like Golden Seeds, BELLE Capital, Gaingels, and 37 Angels. Three-quarters of them have emerged in just the last three years.
Perhaps the best known is Golden Seeds, which was founded in 2004. Golden Seeds is an angel network that invests in female founders and management teams. Since its inception the group has invested over $70MM in more than 65 companies and has grown to over 275 members. Some of their noteworthy investments include Design2Launch (Acquired by Kodak), Lovesac, CourseHourse and Zady.
Two Golden Seeds members Paul Grossinger and David Beatty recently formed the first angel network focused on LGBT led businesses, Gaingels. Launched just six months ago, Gaingels has already closed three investments and grown its membership base to over 90 members. The early success Gaingels illustrates a true market need for an angel group focused on LGBT businesses.
“Gaingels joined in our Seed Round for Imperative, turned around a quick investment from its members and immediately hit the ground running to advise us on strategy and business development. The Gaingels have proven to not only invest money, but also time, energy, and direction to help its portfolio companies thrives” – Arthur Woods, CEO of Imperative
As Woods points out, affinity based angel networks are about much more than providing early capital. They provide founders with a network of entrepreneurs and experienced professionals who want to help these businesses grow. Whether companies have secured investment or not, members of Gaingels, Golden Seeds and other affinity focused angel networks help businesses secure corporate pilots, win business development deals, acquire customers, establish key partnerships and more. Making the connections the businesses needs to be successful.
As these groups are showing, affinity based networks are rapidly emerging, expanding, and empowering the next generation of business leaders. With diversity as a goal, we can expect to see more diverse businesses raise capital and make the connections they need to succeed.
Capital + Mentorship + Affinity Focus = a Powerful formula for startups to thrive.
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