In time for pride: LGBT investment group to start operations in Tel Aviv
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The Tel Aviv municipality celebrates pride. Photo credit: Guy Tsarur

The Tel Aviv municipality celebrates pride. Photo credit: Guy Tsarur

Gaingel’s condition for investment? One of the startup’s founders or executives must be a member of the LGBT community

We know what you’re thinking: Isn’t this a kind of discrimination, right? Well, not to sound too judgmental, but only allowing heterosexual couples to get married is discriminatory as well, and this is a private firm rather than a public denouncement of same sex marriage.

So now that we have addressed the elephant in the room, meet Gaingels: an LGBT angels group that is like a well connected members club.

Not only investment

Paul Grossinger and David Beatty, both from New York, founded Gaingels two years ago. The two came to the conclusion that if there was a group to link the many LGBT members of the hi-tech community together, then there would be huge potential for social and business partnerships.

“We wanted to build a community of people that know each other and share a powerful common denominator. Not all Gaingels members necessarily invest, each one helps in his own way, but every member holds a key position and is very well connected in his own right,” Grossinger tells Geektime in Tel Aviv.

At first glance, and while looking at Grossinger’s resume, it’s hard to realize that underneath all the impressive titles, this Jewish American guy that founded Gaingels alongside David Beatty is only 26 years old — not exactly the typical type cast you would associate with an angel investor.

As an investor, Grossinger has 74 different startup investments under his belt and he serves as a senior advisor for a number of investment funds, is a daily writer for Inc.com, and has a communications degree from Columbia and a political science degree from Johns Hopkins.

His brief stay in Israel is dedicated to a series of meetings focused on jumpstarting Gaingels’ Tel Aviv branch. The goal is quite modest: recruiting an initial number of 15 members that will be a part of the international Gaingels community, which has more than 120 members worldwide. A community that is based on a strong common denominator such as this may serve as a significant international ecosystem for all of its members.

“There is no doubt that Tel Aviv is the warmest and friendliest city in the Middle East for the LGBT community.”

So why Tel Aviv?

“First of all, Tel aviv is full of entrepreneurship and innovation. Second of all,” Grossinger believes that, “There is no doubt that Tel Aviv is the warmest and friendliest city in the Middle East for the LGBT community.”

He tells us, “When we examine new locations to expand to, we look at two conditions: How large and dominant the LGBT community is, and how much the city is characterized by entrepreneurship and innovation. It is needless to say that in both cases Tel Aviv has passed the test with flying colors,” no pun intended. 

Gaingels’ largest community is in New York where it currently has 50 members. A few weeks ago, the project expanded to Chicago and now it is making its way to Tel Aviv. Gaingels is expected to launch in London and Los Angeles in the near future, and the founders say that is only the beginning.

Low investment volume, focused on early stage investment rounds

The American embassy in Tel Aviv expressing LGBT solidarity. Photo credit: Guy Tsarur

The American embassy in Tel Aviv expressing LGBT solidarity. Photo credit: Guy Tsarur

As of this time of reporting, Gaingels has invested $8 million in different startups, but it is estimated that investments will grow toward the $25 million mark next year and continue to rise on an annual basis. Investments are mainly focused on the early rounds (Pre-seed, Seed, and A) and follow a rather interesting path.

There are no forms or applications to fill out. The only way to get Gaingels to look at a startup for potential investment is for a Gaingels member to bring its name up in group discussions.

It’s a system built solely on connections and an individual who knows one of the Gaingels members can pitch his idea to the member, and might get looked at by the Gaingels investment group. After a member proposes a potential startup for investment, a vote is taken among the members. In the event that the investment garners 70 percent or more approval, it will then be carried out.

“The process that we created is responsible for an aggressive filtering of the companies that we invest in. We are looking for the best possible startups with the best possible teams, those that could raise money without us, but our connections will help them grow and improve,” says Grossinger. In general, he strongly emphasizes that the investment is only a small part of the overall idea behind the project, with the main target being the creation of an exclusive club of well connected people that have a strong common bond.

“We hold six events a year and push our friends to collaborate and help each other,” Grossinger explains, clarifying that, “At the end of the day, we are also angels and every deal is thoroughly examined. When people invest money, the goal is also to make money.”

Tel Aviv Pride Week is taking place this week, attracting tens of thousands of tourists from all over the world. An LGBT tourist coming to spend Pride Week in Israel stays an average of 3.5 days in the country and spends about $275 a day, which is a figure 40% higher than non-LGBT tourists. In recent years, Tel Aviv has become one of the most popular and well known cities for the LGBT community and over 100,000 people are expected to attend the main attraction of Pride Week: Tel Aviv’s Pride Parade.

In the midst of all the celebration, it’s nice to know that all the attention that the city is getting could also lead to exposure on the business level.

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Roy Latke

About Roy Latke


Technology geek with a touch of apple, with a bit taken out of it. Living and breathing technology with a measured obsession. Criminologist by training, fighting crime and the establishment simultaneously. Enjoys writing, reading and examining thoroughly everything that can be disassembled; from tech devices to the human mind. Editor at Geektime.

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  • Wedgecut lover

    Yes it is discrimination. Discrimination goes both ways, your basis of “this is a private firm rather than a public denouncement” doesn’t make it so. There have been private companies all over the US that have been sued and forced to go out of business for only serving heterosexuals.