How to Invest in LGBTQ+ Businesses during Pride Month 2021
Updated: Jul 16, 2021
This Pride month, while large corporations are turning their logos rainbow colors and promoting their own inclusive policies, what about the small businesses on Main Street run every day by LGBTQ+ individuals?
LGBTQ+ entrepreneurs and small business owners create economic opportunities, chances for employment, and safe spaces in their neighborhoods. They deserve recognition and investment as much as the next business owner and should be considered in your impact investing portfolio, but they constantly fly under the radar.
Read on to find out more about the importance of supporting LGBTQ+-owned businesses and what you can do to support them!
Here's a quick overview of this article on how to support LGBTQ+ small businesses:
Why you should support LGBTQ+ small businesses
LGBTQ+ businesses also have a national and global impact on the economy. LGBTBEs (lesbian, gay, bisexual, and transgender business enterprises) have created 33,000 jobs by 2016 and contributed $1.7 trillion to the economy. In fact, economist M.V. Lee Badgett has calculated that due to discriminatory policies against LGBTQ+ communities, national economies lose 1% of potential GDP.
LGBTQ business owners are not legally protected by discrimination, so in some cases, it might be even more difficult to get traditional funding from a bank or other lender, or even venture capital.
That being said, there are still disparities of opportunity within the LGBTQ community itself, along the lines of gender and race. It has been especially difficult for women LGBTQ entrepreneurs to find support and funding, and even more difficult for those in the transgender community.
The gender gap for LGBTQ+-owned businesses that seek out capital is especially noticeable: 75% of female LGBTQ+ entrepreneurs fund less than $750,000 from venture capital, whereas 47% of male LGBTQ+ entrepreneurs were able to raise more than $2 million. This shows that while there is an interest in impact investing in the LGBTQ+ community, it should also be focused on a more diverse array of businesses.
One of the most important reasons to support LGBTQ+-owned small businesses is that they are often safe spaces and create economic opportunities for LGBTQ+ individuals. As is the case for most businesses, coronavirus, in particular, has become a major threat to LGBTQ+ businesses that thrive on in-person contact - most notably nightclubs.
Where to find LGBTQ+-owned small businesses
So, now that you’re interested in helping out LGBTQ+-owned small businesses, how do you find them? Sometimes it might be difficult to find these businesses because business owners might not feel comfortable putting their identity out there for various reasons. But, for those who make being LGBTQ+ owned, or LGBTQ+ friendly an important part of their business’s values, there are different ways you can find them.
Many cities have LGBTQ+ business directories to help direct consumers with businesses they want to support! While a lot of these directories are often in areas with large LGBTQ+ populations, such as the East and West Coast, it doesn’t hurt to see if there’s one in your area or your state!
Here are just some business directories you can use to find LGBTQ+ owned businesses:
The press can often be a great place to learn about new LGBTQ+-owned businesses in your area! If your local paper or magazine does an annual “Best of” feature, check and see if they have a section on “Best LGBTQ+ owned business” like this article in the Pittsburgh City Paper featuring Leona’s, an ice cream sandwich company.
Many LGBTQ+ focused magazines also do best of business lists for small businesses, or otherwise review LGBTQ+ businesses. Out Magazine, for example, will highlight LGBTQ+-owned or friendly businesses in their travel section.
LGBTQ+ Chambers of Commerce
Another easy and vetted way of finding LGBTQ+ businesses is to check with the local chamber of commerce. In many areas, there are even LGBTQ+ specific chambers of commerce that provide business directories, networking, and other resources.
The National LGBTQ Chamber of Commerce (NGLCC) is one such national network, and it’s also the only third-party certifying body for LGBTBEs. They have affiliate partners all across the United States and internationally, as well!
How to support LGBTQ+-owned small businesses
So, now you know why you should support LGBTQ+-owned small businesses, and where you can potentially find them, how can you support them?
Invest in LGBTQ+-owned small businesses
As we’ve established, LGBTQ+-owned businesses sometimes struggle with finding financing for their capital needs due to discrimination, lack of resources, or other factors. This is why, if there’s an opportunity to invest in an LGBTQ+-owned small business, it would be a great chance to not only support them but also support the community as a whole.
One means of investing in LGBTQ+ businesses is by participating in crowdfunding! Many LGBTQ+ businesses crowdfund because it’s a way of raising capital with the help of their community - strengthening bonds and funding new economic opportunities in the neighborhood!
Debt crowdfunding is one way that LGBTQ+ businesses can not only raise capital for themselves but also financially empower the people who invest in them. Honeycomb has had the honor of funding several crowdfunding campaigns run by LGBTQ+ businesses, each of which uplifts their community through what they do.
One such example is Pierogi Pantry, a pierogi bakery out of Cleveland, Ohio. Run by Nikki and Jay Odongray, Pierogi Pantry needed capital to build out their commercial kitchen space so they could sell more in a retail setting.
After raising $37,150 in their crowdfunding campaign, they were able to work towards building the Cleveland Bakery Collective, a communal commercial kitchen available for other startup food businesses.
Kari DeGraff, another LGBTQ+ Cleveland business owner, invested in Pierogi Pantry and said, “Pierogi Pantry’s comfort foods are a local favorite and exactly what you need when the craving hits. Their bakery collective is an excellent way for entrepreneurs to collaborate and support one another. These gals make it happen!”
Donate to LGBTQ+ small businesses
Some LGBTQ+ businesses take donations, either for themselves or for local charities and nonprofits that support LGBTQ+ individuals. If they offer an opportunity to donate, and you’re willing to give, this is one easy, no-strings way of supporting LGBTQ+ business.
For example, a really important way you can support LGBTQ+ businesses through donation is by donating to their employee tip jars or mutual aid programs! Especially in the wake of the coronavirus pandemic, many LGBTQ+ businesses, especially restaurants and nightclubs, have established these systems to help support employees who might be unable to work.
Buy from LGBTQ+ small businesses
Not to state the obvious, but one of the best ways you can support LGBTQ+ businesses is by visiting their establishments (or their e-commerce sites) and buying stuff!
Now that coronavirus restrictions are lifting, more and more nightclubs are opening up, as well as restaurants and shops that had switched to online ordering and shopping. Go out and visit them, talk to the staff and owners if you have the chance, and show your support with your presence and your dollars.
By going to local shops and restaurants, your business will have a much greater impact on the small LGBTQ+ business owners than it ever would buying a rainbow pair of suspenders from Target, and you have the opportunity to form connections within your community and help make it a more vibrant place to be.
Invest with Pride in your Neighborhood
LGBTQ+ businesses do amazing work by providing employment opportunities, great products and services, economic mobility, and safe spaces in their neighborhoods. You can do your part in showing your pride by supporting small LGBTQ+ businesses through both your purchases and your investments!
Learn more about how you can invest in these and other small businesses that are crowdfunding through Honeycomb Credit at www.honeycombcredit.com/explore