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Before dating apps became ubiquitous, Arlan Hamilton envisioned making her debut in Silicon Valley with an online dating service that would prioritize quality over quantity. “It was going to be a version 2.0 of a matchmaking website,” she says. “My idea was that I [could] make one couple happen once a day.” But Hamilton, a gay black woman and former music tour manager from Texas, was hardly the prototypical founder, and she quickly realized people like her were being neglected by investors in Silicon Valley.
“I started learning more and more about the discrepancies in the amount of money that goes to people who are not straight white men,” she says. “It was not only blatantly laid out in statistics. I was seeing it happen in real time. It just changed what my future would be.”
What she eventually created took aim not at the dating industry, but at the status quo of venture capital deal flow, which overwhelmingly backs white male founders. Only 12% of venture capital dollars go toward startups with at least one female founder, according to All Raise. Since 2009, of the nearly $425 billion raised in venture funding, just 0.32% went to startups led by Latinx women and .0006% to black female founders.
Hamilton, who was broke and homeless when she first arrived in San Francisco, spent months courting investors to no avail, eventually publishing a Medium post titled “Dear White Venture Capitalists: If you’re reading this, it’s (almost!) too late.” Hamilton finally got her break when angel investor Susan Kimberlin wrote her a check for $25,000, and soon after, she caught the eye of prominent venture capitalists like Chris Sacca and Marc Andreessen.
Since launching Backstage Capital in 2015, Hamilton has invested more than $7 million in 130 companies, 24 of which were through an accelerator that Backstage Capital launched last year across four cities: Los Angeles, Philadelphia, Detroit, and London. Backstage Capital typically invests between $25,000 and $100,000 into each startup. Last year, after learning that Hamilton was struggling to raise money, Mark Cuban offered to invest $1 million. This month, she published her first book, It’s About Damn Time, and amid the coronavirus crisis, Backstage Capital has offered additional support to its portfolio and other founders through investor meetings and office hours, as well as legal and financial resources.
Unlike other venture capitalists, some of whom merely pay lip service to Silicon Valley’s diversity problem, Hamilton has woven identity into the DNA of Backstage Capital—namely, her own identity as a gay black woman. “I originally wanted to start a $1 million fund for LGBTQ founders,” she says, “[but I] couldn’t get traction. Then I said, let me just start with everything that I feel like I am.” That’s why Backstage Capital invests in all underrepresented entrepreneurs: women, people of color, and LGBTQ founders.
Hamilton isn’t just an advocate for the founders she invests in. Over the past few years, she has drawn admirers and press—including a cover story in Fast Company—and has made frequent speaking appearances to amplify her message. “I realized this isn’t going to be contained to just the amount of people I can get a check to,” she says. “This is going to have reverberations through whomever can see it—whoever can feel represented in this.”
Hamilton is, by her own admission, an “open book” on Twitter, where she regales her 70,000+ Twitter followers with candid commentary on her life and the venture capital industry. She first found an audience on a blog she ran in her twenties. “It started because of my identity as a gay person,” she says. “I had a blog for years called ‘Your Daily Lesbian Moment.'” Hamilton has been out since she was 16, but it was the response to the blog—and its 50,000 monthly visitors—that encouraged her to be as forthcoming as she is now. “[I realized] how much just stating my truth was helping other people,” she says. “People would write to me from the blog or MySpace and Facebook and say, ‘Because you talked so openly and freely about being a lesbian, I was able to come out to my parents.'”
Of course, Hamilton also has her detractors: Some industry observers have questioned her progress on a $36 million fund she announced in 2018, which she said would exclusively invest in black female founders. (According to Hamilton, two key investors fell through.) But Hamilton isn’t too bothered—and she’s still raising money. “I know what the future looks like for Backstage, and I’m doing this for the right reasons,” she says. “I’ll be doing this for decades.”
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