Gaingels

Daylight, the LGBTQ+ neobank, raises cash to launch subscription plan for family planning • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in Anthemis Group, Apps, Bank, citi ventures, daylight, Fintech, funding, Gaingels, Kapor Capital, lgbtq, neobank, queer, startup, StartupsNo Comments

A day after a bill that would codify same-sex marriage in the U.S. cleared a key hurdle in the Senate, Daylight, a digital bank that pitches itself as LGBTQIA+-friendly, closed a $15 million Series A round led by Anthemis Group with participation from CMFG Ventures, Kapor Capital, Citi Ventures and Gaingels. Daylight Co-founder and CEO Rob Curtis says that the new capital will be used to, in his words, “build the financial products and services to help queer people live their best lives” — starting with a subscription plan called Daylight Grow designed to help prospective queer families with financial planning. “There are over 30 million LGBTQ+ Americans with a spending power of around $1 trillion and yet the community lacks access to the suite of products and services they need to live their best lives,” Curtis told ZebethMedia in an email interview. “Daylight was created with a single mission: to build the financial products and services to help queer people live their best lives.” Curtis co-launched Daylight with Billie Simmons, a trans woman, and Paul Barnes-Hoggett in early 2020. Prior to starting Daylight, Curtis worked for several organizations supporting the LGBTQ+ lifestyle and causes, including Gaydar, a dating site for gay and bisexual men. He also co-founded Squad Social and Helsa Helps, startups aiming to improve access to mental health for members in the LGBTQ+ community. Daylight is a part of wave of recent neobanks — bank-like fintech companies that operate online, without physical branch networks — organized around aspirational causes and missions. Rapper Killer Mike’s Greenwood aims to help Black and Latinx communities build generational wealth. Majority, which launched the same year as Greenwood (2020), seeks to build banking tools and resources for immigrants. Purpose Banking, Aspiration and One all promise to never let deposits fund fossil fuels. Image Credits: Daylight With the wealth of ethics-forward fintechs out there, why found a neobank for LGBTQ+ people? According to Curtis, most mainstream banking products simply weren’t designed with U.S.-based queer folks in mind. (Pride Bank, a neobank with similarly queer-forward branding, is based in Brazil.) For example, Daylight provides debit cards with customers’ chosen names, which aren’t always the same as what’s on their ID. It offers members 10% cash back every time they spend with a queer and allied business that Daylight has partnered with. And it offers guided goals for gender-affirming procedures like top surgery and facial feminization. Beyond cash management features like a checking account, free ATMs and the ability for members to get paid two days early, Daylight hosts communities where customers can ask questions around “queer financial literacy,” such as family planning, in what Curtis claims is a safe and supportive environment. “At Daylight, our mission has always been to break down the financial barriers that hold LGBTQ+ people back … In this post-Dobbs world, Daylight’s commitment to supporting queer families has never been more necessary,” Curtis said, referring to the Supreme Court case that legalized abortion bans in the U.S. and opened the door to legal challenges of marriage equality. Certainly, members of the LGBTQ+ community face fiscal challenges that many cisgender, straight adults never do. Some suffer the consequences of being kicked out of their homes by unaccepting parents. Others find themselves on the hook for HIV/AIDS treatment, hormone therapy and fertility procedures. Most queer people gravitate toward pricey metro areas because they’re more accepting and progressive, and many queer people lack a safety net — whether because they lack family support or don’t have children who can take care of them. For those reasons and others, LGBTQ+ people frequently earn less, live in poverty and have less in pension savings than their cisgender counterparts. The situation for transgender people is particularly dire, with the poverty rate for the transgender community in the U.S. averaging around 30% — close to double the rate of cisgender adults — according to a 2019 study from the UCLA School of Law’s Williams Institute. Transgender people are also twice as likely to be unemployed and four times as likely to have a household income below $10,000; the 2021 U.S. federal poverty was $12,880. The aforementioned Daylight Grow isn’t a cure-all, but targets the major hurdles many queer couples encounter in starting a family. This is a significant portion of Daylight’s customers. A recent poll by the Family Equality Council found that nearly two-thirds of LGBTQ millennials — 63% — are considering becoming parents for the first time or expanding their family. Image Credits: Daylight When the product launches in early 2023, Simmons says that Daylight Grow will offer a personalized “family creation plan” covering financial, legal and logistical milestones tailored to individual states and needs, “family planning concierges” to provide financial advice and logistical support, a “family-building marketplace” with vetted family attorney networks and recommendations for IVF and surrogacy clinics, and in-person financial and fertility education events. “Family creation is a major life event for queer people and the challenges we face are increasingly more complex than those for non-LGBTQ people,” Simmons told ZebethMedia via email. “The launch of Daylight Grow will help queer people navigate through the complex legal and financial challenges involved with starting a family, making it faster and easier to start a family, and unlocking critical intergenerational wealth for our community.” Daylight Grow will also offer access to family-building loans, a potential game-changer for queer customers who’ve dealt with discrimination from traditional banks. According to a 2019 study, same-sex borrowers were 73% more likely to be denied a mortgage or be approved for a mortgage at a higher-than-average interest rate. Daylight plans to offer hundreds of free Grow subscriptions to low-income, marginalized families in states where LGBTQ+ rights are under significant legal attack, Curtis said. Which states — and Grow’s pricing — are still being decided. Daylight has raised $20 million in capital to date. Curtis wouldn’t answer questions about revenue and hiring plans, preferring, at least for now, to keep the focus on the company’s core mission.

These folks are working to bring more diversity to the venture LP investing pool • ZebethMedia

By zebethcontrolPosted on November 7, 2022Posted in bonfire ventures, Cap Table Coalition, Community Growth Capital, diversity, Gaingels, VentureNo Comments

When you think about diversity in the startup ecosystem, one area that could be overlooked is the limited partner pool. These are the folks who contribute to the larger funds or individual investments. They don’t necessarily have the same influence over deals that VCs do, but they are a key piece that provides the cash to grease the startup funding framework. Having more heterogeneity in this part of the system ultimately helps bring more diversity to cap tables. One of the reasons that LPs aren’t more diverse is likely due to the fact that the VC firms themselves typically aren’t. If the partners at investment firms are seeking limited partners, they are probably going to reach out to their own networks, and that tends to be people who look like them and run in the same circles. Since the vast majority of VC partners are white and male, it’s a hard pattern to break. In fact, it takes a concerted effort to get people involved who have been left out of deals in the past. This isn’t just about diversity for diversity’s sake, either. It’s also about wealth creation, who’s being included and who’s being left out. While venture investing often involves many misses, when a deal hits, it can bring generational-changing wealth for the investors who got in early. If the cap table is confined to mostly white men, that leaves out a lot of people who have been historically underrepresented across society. A number of folks with access to deal flows are attempting to change this on their own, some as a side hustle, working to bring in a more diverse set of people to the investor pool. As an example, last year we wrote about Amanda Robson, a partner at Cowboy Ventures, who has started in an informal angel network of women and non-binary folks, who have means but have never been asked to be included in deals before. “I had a number of friends who had recently within the past couple of years become VP-level at different companies, and they had an interest in angel investing, and they had the means to at that point, but they didn’t have access,” she told us at the time. Robson created her network to give the same access that their male counterparts are getting. She has built this network on her own in her free time, because she recognizes the importance of bringing historically underrepresented groups to the cap table. And she’s not alone. We spoke to several folks who are making a concerted effort to get more people involved, some doing it in addition to a demanding full-time job. People with money, but no access There are plenty of people from historically underrepresented groups who have the money to invest, but typically haven’t been asked or don’t know how to go about it. These aren’t just people in the tech industry, either — it’s a variety of wealthy professionals who have been left out of the startup investment process. Shruti Challa and her husband, Patrick Ekeruo, launched Community Growth Capital this year to give people like this access to later-stage deals with the goal of democratizing growth-stage cap tables. This is in addition to their day jobs. Challa is CRO at hospitality startup Sonder, while Ekeruo is assistant general counsel at fintech startup Brex. The couple has been involved in investing on their own, including investments in SpaceX and Robinhood, but they want to create a network to bring in people they know, who have not been asked to be involved in startup investments. “Our goal is to give access to these underrepresented minorities and help them close the generational and racial- and minority-driven wealth gap that exists, even for people at higher [income] levels,” Challa told ZebethMedia. Ekeruo said that there are founders out there who want to diversify their cap tables, but don’t know where to start, and firms like his and Challa’s can help. “There’s a growing chorus that understands that diversifying every piece of the tech ecosystem is important, including the cap table, and we bring our diverse LPs to the cap table and to our growth equity partners, who in turn can offer that to founders who want to diversify their cap tables because they recognize it as a problem,” he said. He says that going for the later stage companies also lets them bring more tangible financials to a new investor than angel investing where you are basically investing in a person or a team with an idea. “When I’m talking to somebody who’s used to doing public company investing, it’s much easier for me to say, ‘Look, this company has a product, has product market fit, they are raising $75 million in order to grow revenue because they expect to go public in four to five years.’” The Cap Table Coalition (CTC) is another group trying to pull in investors that have been historically left out of the investing process. Richie Serna, whose day job is CEO at payments startup Finix, helped build CTC. The network of 775 investors, many of whom are from historically underrepresented groups, grew from his own contacts and exploded from there. The firm helps people get involved by making it possible to write much smaller checks, especially in later-stage rounds. “I think one of the issues is that after the seed round, every investment is probably like a minimum $50,000 to $100,000 to get onto a cap table just because of the sort of administrative work that’s involved. And so by forming one SPV… people can invest $5,000 to $10,000 and start to build a portfolio that way [and we can include a lot more people],” he said. Expanding the pie When you include a wider variety of people in investing, it can impact the entire system from the cap table to the boardroom to founders, executive teams, and workforces, and it can lead to more diverse wealth creation over time because some percentage of