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The Story Behind the Nation's First Standalone LGBTQ+ Accelerator, Which Graduates Its 20th Startup Today StartOut Growth Lab is billed as the first standalone, brick-and-mortar accelerator focusing entirely on LGBTQ+ entrepreneurs.

By Hayden Field

entrepreneur daily
A group of cohort entrepreneurs at a StartOut Awards ceremony.

On a sunny day in April 2004, Tom Gaynor put on a brand-new pinstripe suit and studied like mad for his upcoming interview at a Washington, D.C., law firm.

He had planned a move to the city with his partner, and this round of interviews meant meeting with 15 different lawyers over the span of about eight hours. He prepared by going over the names and job descriptions of the people he was about to meet, thinking about where his experience overlapped with theirs and what they had in common.

Gaynor walked into the office in his new suit looking like "Joe Wannabe Lawyer," he recalled, but by lunchtime, after he'd made it through about half of the meetings, he received a call from his recruiter with great news. She'd just spoken with the HR coordinator, and the firm planned to give him an offer as soon as he got through the rest of the afternoon -- the "perfunctory" stuff.

Around 5 p.m., after interviews had wrapped up, Gaynor remembered the firm's managing partner returning to tell him that the feedback was terrific -- they wanted him to start immediately.

Gaynor told the managing partner he was excited and that he'd check with his partner to see exactly what day he may be able to start.

"Partner? What do you mean? I'm not hiring you as a team -- I'm just hiring you," Gaynor remembered hearing. He clarified that he meant his life partner, not a law firm partner, and watched as the executive's face seemed to change before he told him they'd suspend the conversation until Monday, then left abruptly. Gaynor dialed up his recruiter.

"What happened?" he remembered her asking. "All of a sudden, the HR person called me back and said they're not going to extend an offer. Something happened in the last discussion."

Gaynor explained the final conversation, and he recalls his recruiter telling him, "You need to determine what you want to do because they basically just withdrew the offer because you're gay."

I may be gay, but I'm also a corporate lawyer who intends to continue to be a corporate lawyer, Gaynor thought. He didn't want to risk destroying his career by suing the firm, so he went on to accept a different role working under one of the first openly gay heads of a major law firm in the U.S. "He was for me a beacon of the future and what could be on the horizon," Gaynor said.

Gaynor resolved to be that kind of beacon for someone else, and in April 2017, he helped turn what he calls the nation's first standalone LGBTQ+ growth lab accelerator into a reality.

In 2015, after Gaynor accepted a position with global law firm Nixon Peabody, he felt it was a sign -- the law profession on the whole had become exponentially more open-minded over the past decade. He decided to use that as fuel for a new idea: Work with StartOut, the largest U.S. nonprofit organization dedicated to fostering leadership in LGBTQ+ entrepreneurs. Less than five minutes after he presented the potential partnership, the law firm jumped at it. It was one of the most exciting moments of Gaynor's career.

When the nonprofit hired a new executive director, Andres Wydler, in the fall of 2016, Gaynor set a meeting with him at an izakaya-style Japanese restaurant in San Francisco. They both ordered tea to help fight off their respective colds -- Gaynor does some of his best work on chamomile -- and the get-to-know-you nature of the conversation soon morphed into something entirely different. After 45 minutes, they had sketched out the idea for a new accelerator for LGBTQ+ entrepreneurs -- a "growth lab" -- on the back of a napkin. There were precedents -- LGBTQ+ entrepreneur initiatives that were part of larger, not-LGBTQ+-exclusive accelerators; programs offered by financial institutions to help LGBTQ+ entrepreneurs win capital grants; a LGBTQ+-focused venture capital fund -- but the two imagined that StartOut Growth Lab would be the first standalone, brick-and-mortar startup growth accelerator for LGBTQ+ entrepreneurs.

Their happy hour idea was made a reality in April 2017, and since then, it's grown into StartOut Growth Lab, an accelerator that offers both office space and mentoring, education and networking opportunities for any startup founded or co-founded by LGBTQ+ entrepreneurs. So far, it's graduated 20 companies, and it hosts a new cohort of up to seven different startups every six months. The growth lab provides access to other founders, angel investors and other potential funding outlets, as well as lunch-and-learns and panel discussions.

Those young companies innovate in a variety of different industries -- cybersecurity insurance, virtual reality, medical technology and more. Alumni range from Goodly, a student loan repayment service that allows employers to make contributions as an employee benefit, to Reflect, a mental health platform that aims to connect individuals to therapists best-suited to their needs.

The key here, Gaynor said, is giving LGBTQ+ entrepreneurs -- who may not always be taken seriously in the "bro finance world" -- the opportunity to pitch their product or service to the company of their dreams.

"That sends chills down my spine," he said.

There's no way to know exactly how many small businesses in the U.S. are owned or operated by LGBTQ+ individuals, but research from the National LGBT Chamber of Commerce (NGLCC) -- a nonprofit advocacy group billed as the business voice of the LGBTQ+ community -- can serve as one gauge. Senior vice president Jonathan Lovitz said that out of nearly 28 million small businesses across the country, close to 1,200 of them -- or just 0.004 percent -- are officially certified as LGBT Business Enterprises, meaning they're majority owned, operated, managed and controlled by an LGBT person or group.

But LGBTQ+ entrepreneurs are paving the way for more to follow in their footsteps. Though the number of certified small businesses in the community may be small, according to a 2016 report, they are mighty in other areas: resilience (averaging 12 years in business), revenue (averaging close to $2.5 million per year) and, when used in conjunction with the NGLCC's estimate of 1.4 million total LGBTQ+ small-business owners in the U.S., projected economic contribution ($1.7 trillion per year).

Currently, certified LGBTQ+ businesses are concentrated in California, New York, Texas, Florida and Georgia, according to NGLCC data, but in the coming years, Lovitz predicted that the number of corporations engaging LGBTQ+-owned companies as suppliers -- particularly in historically "under-inclusive industries" such as construction and law -- will increase exponentially.

"We're keeping an eye on those companies that are investing in this community," Lovitz said. "We're in this time of unprecedented public sector growth for the inclusion of our businesses."

Accelerators such as StartOut Growth Lab help drive those contributions, and over the next five years, Gaynor foresees LGBTQ+-focused entrepreneurship programs replicating.

"We want to even the playing field sufficiently [so] that any entrepreneur, regardless of their background, their sexual orientation, their race, their gender, will have equal opportunity for their shot at economic liberty and economic freedom," he said.

Hayden Field

Entrepreneur Staff

Associate Editor

Hayden Field is an associate editor at Entrepreneur. She covers technology, business and science. Her work has also appeared in Fortune Magazine, Mashable, Refinery29 and others. 

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