The first awkward word in startup finance may be “family.” Before there is a term sheet, there is supposed to be an uncle, a former colleague, somebody who believes in you enough to write a check. Ben Stokes noticed a problem while investing in LGBTQ+ founders: some had lost those relationships after coming out. The customary first rung of the funding ladder was missing.
THE IDEA IN 30 SECONDS
- Invest early in businesses with LGBTQ+ founders.
- Write initial checks of $50,000–$250,000.
- Add mentors, customer introductions, and connections to the next investor.
- Look across industries, because founder identity does not define the customer.
Chasing Rainbows was built around that opening. It is a venture capital firm with an LGBTQ+ founder focus and a commercial ambition: find promising companies that other investors overlook, then help them become worth more. The important question is what this focus lets the firm see.
A narrower lens, a wider field
Stokes initially wanted to support underrepresented founders broadly. In VC Include’s account, advice from Adam Sterling, associated with Berkeley’s VC University, pushed him toward the networks he knew best. The LGBTQ+ focus gave the firm a more specific way to find companies and attract referrals. Specificity made the proposition easier to understand.
Stokes and co-founder Patrick Driscoll met through StartOut, the LGBTQ+ entrepreneurship organization. Their experience complemented each other: Stokes had founded SocialTable, a social dining business, and invested as an angel; Driscoll brought experience from venture programs, including 500 Global. Their shared community supplied relationships; their different backgrounds supplied ways to evaluate and support businesses.
That photograph belongs to an earlier chapter. Driscoll’s FINRA record says he relinquished his general partner title and responsibilities in May 2024 while retaining management-company ownership. It is a useful reminder that a fund’s origin story and its present operating team are different things.
The founder is the filter
Consider three businesses Chasing Rainbows identified as portfolio companies in February 2025. Hello Wonder develops an AI-powered browser for children. Gosu Academy offers esports training. ESAI helps students navigate college applications. Parents, competitive gamers, and prospective undergraduates are hardly one customer segment.
They illustrate the distinction at the heart of the firm. LGBTQ+ describes the founders it backs. It does not confine those founders to selling to LGBTQ+ customers. A founder-focused investment thesis can travel through several markets without pretending that each market works the same way.
The firm calls itself sector agnostic, while emphasizing healthcare, sustainability, education, and financial inclusion. Those areas offer a guide to its interests. Its published strategy also reaches from pre-seed through Series A, leaving room for companies at different points between an early product and a more established business.
Within the wider market, founders can also approach generalist seed funds and angel syndicates. Chasing Rainbows’ own writing points to Gaingels and Out Investments as other participants in LGBTQ+ investing. StartOut occupies a different position as an entrepreneurship organization. For a founder choosing where to spend fundraising time, the useful comparison is specific: stage, check size, relevant relationships, and the investor’s willingness to help assemble the next round.
A check with a second job
The current founders and investors pages list initial investments of $50,000–$250,000, with follow-on possibilities. The firm also says it can lead rounds. For a founder, that makes it a possible early participant in a financing, rather than a source of money reserved for businesses already far along.
Capital is only part of the offer. Chasing Rainbows describes help with strategy, performance indicators, coaching, and introductions to customers and other investors. These are practical jobs. A founder needs to decide what to measure, demonstrate progress, and find people willing to pay for the product before asking someone else to finance its expansion.
“If you’ve got customers using your product, you are worlds ahead”
Ben Stokes · Around the World in VC
That emphasis on customers gives the support model some discipline. An introduction becomes valuable when the business is ready to use it. Advice earns its keep when it changes a decision. Mentorship and networks are easy promises to make; the operating milestones are where founders can judge whether those promises help.
Follow the money carefully
There are two constituencies here: startups seeking investment and limited partners providing the fund’s capital. The published investor offering combines a traditional venture fund with opportunities to co-invest through syndicates. One provides exposure across a portfolio; the other opens a route into particular deals.
A September 13, 2024 Fund I filing reported $885,000 sold to 19 investors. That is a dated fundraising disclosure, not a current assets figure or a final fund size. It gives the story a concrete financial marker without turning an ambition into money already raised.
THE PUBLISHED GEOGRAPHIC PLAN
Investment strategy, not a measured portfolio breakdown.
For founders, the cost of venture money is ownership and the expectations that accompany it. In his Business Gay interview, Stokes describes investing in equity or future equity and cautions founders to consider grants and loans first. A profitable business can be a poor venture investment if it cannot grow or exit on the investor’s timetable.
The part worth borrowing
The copyable idea is a sequence: know a community well enough to earn referrals, identify businesses with commercial evidence, and connect the first investment to the work required for the next stage. A broad claim about diversity becomes more useful when someone can explain where the next customer or investor introduction comes from.
This approach depends on actual relationships and a supply of businesses suited to venture funding. It offers less to someone seeking a grant or building a company without plans for rapid expansion. Chasing Rainbows explicitly asks for traction and a clear scaling strategy. Shared identity opens a conversation; the business has to sustain it.
For a prospective applicant, the preparation is straightforward: show who uses the product, explain the growth plan, and name the help that would move it forward. For an investor, the question is whether the firm’s access produces investments worth owning. Both return to the same small test: once somebody opens the door, what happens next?