Backstage in the greenroom of the podcast festival where she’s scheduled to appear, Arlan Hamilton is quietly singing the lyrics to Janet Jackson’s “Control.” She’d like to walk on stage as the song plays, but the festival crew has copyright concerns. So instead, she is shimmying offstage in her chair, half-humming the chorus under her breath: “I’m in control / Never gonna stop / Control / To get what I want / Control / I like to have a lot.”
Like everything Hamilton does, the song request is equal parts self-aware and unapologetic. Hamilton knows that she stands out—she is the only black, queer woman to have ever built a venture capital firm from scratch. She also knows that she has a reputation for being direct, particularly when it comes to Silicon Valley biases, and how her own story is portrayed. (Indeed, the song is a jab at Gimlet Media, the podcast festival hosts, who devoted an entire episode of their StartUp series on her to what they saw as her sometimes counterproductive need for control.) But Hamilton exudes calm, even as she attempts, through her L.A.-based firm, Backstage Capital, the near impossible task of disrupting the way that venture investors pick winners and create wealth.
“It was crazy to me that 90% of venture funding was going to white men, when that is not how innovation, intelligence, and drive is dispersed in the real world,” she tells me. “I had no background in finance, but I just saw it as a problem. Maybe it’s because I was coming from such a different place that I could recognize it.”
Three years ago, the then 34-year-old Hamilton arrived in Silicon Valley with no college degree, no network, no money, and a singular focus: to invest in underrepresented founders by becoming a venture capitalist. The story of how the former music-tour manager studied up on investing from her home in Pearland, Texas, and pushed her way into the rarified world of venture capital, scoring investments from the likes of Marc Andreessen and Chris Sacca, has become legendary in the industry. After making contact with Y Combinator president Sam Altman, she bought a one-way ticket to San Francisco. For months she stalked investors by day and slept on the floor of the San Francisco airport at night. She was broke. Finally, in September 2015, she got her first check, for $25,000, from Bay Area angel investor Susan Kimberlin, who believed in Hamilton’s vision that the Valley’s lack of diversity wasn’t a talent-pipeline problem as much as a resources problem: Diverse entrepreneurs needed money. With Kimberlin’s endorsement, Hamilton created Backstage Capital and began investing. Other funding soon followed, from backers including Slack CEO Stewart Butterfield and Box CEO Aaron Levie. This past June, Hamilton announced that Backstage had exhausted its first three seed funds, doling out between $25,000 and $100,000 to 100 startups in everything from beauty products to business analytics. And at all 100, at least one founder is a woman, person of color, or someone who identifies as LGBTQ.
Now Hamilton is gearing up for Backstage’s next chapter, a $36 million fund dedicated exclusively to black women founders, a demographic that’s glaringly absent in Silicon Valley: Just three dozen black women entrepreneurs, nationwide, have raised more than $1 million in venture funding. Hamilton calls her latest initiative the “It’s about damn time fund.” Her first two $1 million investments, to be announced before the end of the year, will go to existing Backstage portfolio companies. And that’s just the start. This spring, Hamilton will launch the Backstage Accelerator to foster early-stage startups with locations slated for L.A., Philadelphia, and London. She’s also laying the groundwork for a $100 million fund to provide underrepresented founders with even larger checks.
Every nascent VC is under pressure to demonstrate success—Hamilton even more so. Those in Silicon Valley who believe that the next Facebook will be created by a woman or person of color are watching her portfolio closely. Others view Backstage with more skepticism, seeing her funds as relatively inexpensive ways for investors to appear committed to diversity without having to do the hard work internally.
Hamilton shrugs it off. In an industry where privilege begets privilege—and at a time when racial justice in this country seems precarious, at best—she is claiming her seat at the table. “How much of a fist in the air would it be to just be obnoxiously wealthy as a gay black woman?” she wonders. “And [how powerful] to be able to help other people do the same?”
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