In a span of two and a half years, Backstage Capital–a VC firm that exclusively funds women, people of color, and LGBT founders–has assembled a portfolio of more than 80 companies. Backstage founder and CEO Arlan Hamilton isn’t short on investment opportunities, but funding is another story. That’s why she decided this year to create a venture studio, drawing inspiration from outfits like Betaworks and Pioneer Square Labs.
“We were running out of resources to support our portfolio,” Hamilton told me. “It’s hard to raise. I was thinking of clever ways to keep us going.” A venture studio expands on the traditional role of an investor or accelerator, which would usually focus on funding and mentorship; instead, the studio model actually builds companies. So through Backstage Studio, Hamilton and company will incubate and launch their own products.
The idea is not only to create another revenue stream, but also to support Backstage Capital’s portfolio companies. “With Studio, we can create our own companies and products, and we can use them to add value to the portfolio by helping with some of their pain points,” Hamilton said. “If we see something that’s happening over and over with different companies, no matter what industry they’re in, we are now able to design projects that help them as a portfolio, which is really exciting.”
Plus, Backstage Studio will allow Hamilton’s team to monetize some of the work they’re already being pitched. “We get approached by a lot of large companies to help them access more diverse founders and engineers and so on,” she told me. “And through Studio, we can make that more of an organized effort and generate revenue through product design for larger companies.”
Backstage Studio raised $500,000 in December and has also roped in Mark Levy, Airbnb’s former global head of employee experience, as the head of people and partnerships. (Together, Backstage Studio and Backstage Capital now have 17 employees in total, up from just one full-time employee–Hamilton–a year ago.) The studio is a joint venture with Tangelo, a Silicon Valley-based innovation lab and venture studio, which will act as Backstage’s tech engine. As part of the partnership, Tangelo will share its clientele, and Backstage will offer access to its team and network.
As you’d expect, inclusivity is front and center for both Tangelo and Backstage, which holds true in their own workforces as well. “Together, we’re able to offer a breadth of feedback and talent that homogeneous teams are unable to provide,” Tangelo founder and CEO Antonio Altamirano said via email. “Not only are we diverse in race and gender, we are also diverse in age, character, education, health, and socioeconomic background. We’ve been told that a 100% diverse company is impossible in Silicon Valley. We’re here to tell you that it is not only possible, but that it can truly thrive.”
Perhaps, through Backstage Studio, other companies will learn to do the same. Back in October, Backstage Capital acquired The Door, which doubles as one of Backstage Studio’s first products—a platform that connects VCs with underrepresented founders. Hamilton says Backstage Studio is also working on a product called Runner, which matches executive assistants to startup companies that have raised less than $2 million.
“It’s kind of like I’m doing what our founders do,” she said. “We don’t just sit around and wait for other people. We just make, and we do.”