When Michele Bettencourt stepped down as chief executive of a billion-dollar cyber-security firm, to begin her transition from male to female, she thought her career was over.
Two years later, Bettencourt is not only living as a transgender woman, but she was also named chairwoman of the board of directors for an up-and-coming tech company.
“I’m not worried about hiding my secret,” Bettencourt told the Thomson Reuters Foundation.
“I wore my red Dior dress on a Zoom call – it’s so liberating to be me and not worry about it.”
Bettencourt is part of a growing number of LGBT+ executives, investors, and entrepreneurs in the United States, who are using their financial capital and corporate savvy to support LGBT+ friendly firms – and promote greater inclusion in the process.
Some 17 million people in the United States are LGBT+, and they spend $1.1 trillion a year, according to LGBT+ Capital, one of a growing number of specialist asset management firms.
“The (LGBT+ investment) space is expanding,” said Nicole Douillet, senior advisor at LGBTQ Loyalty, an LGBT-focused financial services company, that last year created the LGBTQ100 Index of the top 100 gay- and trans-friendly public companies.
“People really care not just about earning top dollar with their investment, I think people are starting to see that you can do well financially while doing good in the world.”
Among them is Bettencourt, who as an angel investor looks to finance minority- and women-led startups.
“If there were two investment opportunities and one was LGBT-run, and the other was (not), and both were equal, I would go the LGBT,” she said.
“If you look at the panoply of investment opportunities, why would you just invest in white males?”
While data on LGBT-specific investment is not widely available, analysts say it is part of a wider trend towards environmental, social and governance (ESG) investing, such as avoiding fossil fuel companies.
ESG investment in Europe, the United States, Japan, Canada, Australia and New Zealand hit $30.7 trillion dollars in 2018, up by more than a third in two years, said the Global Sustainable Investment Alliance, a group of investment organisations.
“Back in the 80s and 90s … the investment opportunities around socially responsible investing were pretty much limited,” said Stuart Armstrong, a financial planner with Centinel Financial Group, an investment firm.
“But increasingly you’re seeing Black Rock and other global firms that specifically have (those) kind of ESG, socially responsible portfolios.”
Gaingels, a network of some 700 investors, like Bettencourt, who fund gay- and trans-inclusive firms, has seen its investments grow 10-fold in just two years, from $5 million in 2018 to about $50 million in the first eight months of 2020.
For managing director Lorenzo Thione, LGBT+ investing is not just about generating strong economic returns, it is also about having an impact in business and on society at large.
“If you create financial economic empowerment that drives through and flows to people who are supportive of causes of equality … you are making the lives of every other LGBTQ person better,” he said.
Although many LGBT+ rights have been won in the courtroom – including gay marriage in 2015 and protection from discrimination at work in June – business has also been at the forefront of social change.
When the Human Rights Campaign, an LGBT+ advocacy group, began ranking US companies on their inclusive policies, such as health care benefits for same-sex partners, just 13 firms achieved a 100% rating in 2002.
This year, 686 firms achieved the top score.
Growing LGBT+ acceptance in the business world has opened up new possibilities for socially conscious investors, both gay and straight, who are keen to advance LGBT+ rights, analysts said.
Pro-LGBT+ investors have a history of successfully using shareholder proposals to boost protections for LGBT+ workers.
“Once you have shareholders, who are shareholders because of these LGBT issues specifically, it can push those companies to do even more and go even further to be LGBTQ-friendly,” said Douillet from the financial services company LGBTQ Loyalty.
Research suggests firms that promote LGBT+ equality in the workplace tend to also have improved employee recruitment and retention, better consumer perceptions, and higher profitability and productivity.
“Employees bringing their whole selves to work tend to be more engaged at work, they tend to be more loyal to the company,” said Douillet.
“All of those things should lead to a better economic outcome.”
The LGBTQ100 Index outperformed the S&P 500 Index benchmark – which tracks the stocks of 500 large US companies – by 3.4% in the first six months of 2020, LGBTQ Loyalty said.
Ashley Flucas, a Gaingels member with a portfolio of more than 100 companies, agrees that LGBT+ entrepreneurs are a smart investment.
“Chances are … you really had to hustle and grind your way, facing challenges that for example a straight, white male founder would never have to face,” she said.
“I think that gives you an invaluable, superior edge.”
As the majority of investors backing startups are white, some pro-LGBT+ groups are also promoting inclusion, by helping gay and trans entrepreneurs from ethnic minorities get ahead.
“It’s hard to be an entrepreneur in the first place,” said Stephanie Imah, community engagement manager at StartOut, a non-profit which mentors LGBT+ entrepreneurs.
“When you’re constantly stepping into rooms with people that don’t look like you and who don’t want to invest in you … how many times do you want to do that?”
Gaingels partners with other minority investors like Harlem Capital, which finances Black, Latino and women entrepreneurs, and supports the Diversity Rider initiative which requires startups to include co-investors from minority groups on deals.
Initiatives like these, said Thione of Gaingels, are proof the industry is beginning to change.
“People who would’ve found it twice as hard 20 years ago to start a business – trans people, people of colour, people who are LGBT – … are now finding it easier,” he said.
“You get more stories of success.”
Bettencourt recognises the impact of simply showing up to work in her red Dior dress.
“If there are trans success stories – of folks who thought they were done, went back, got the job, made good things happen, have good reputations – then that should be a beacon for everyone trans thinking about going to work,” she said.
-Oscar Lopez @oscarlopezgib – Thomson Reuters Foundation