DURHAM – Black Wall Street awarded Arlan Hamilton, the gay, black founder of Backstage Capital, who went from sleeping broke and homeless in an airport to heading a $36 million venture fund, its first ever Trailblazer award at the American Tobacco campus Thursday afternoon.
Hamiliton just flew in from a Philadelphia venture conference and was flying off to Houston following her appearance at the Black Wall Street event as part of a trip hitting nine cities in 14 days. She turned her vision into a venture fund that has invested in 100 companies. She landed on the cover of this month’s Fast Company magazine, named a “venture catalyst.” Just three years ago, she said, “I wouldn’t have been able to afford the $7.99 cover price.”
In an onstage chat with Black Wall Street co-f0under Dee McDougal, Hamilton said being broke and starting a venture fund focused on black women and LGBT founders was not the “first crazy thing I did.”
While working on music tour shows and bored on the night shift, she touched base with a Norwegian pop band and said she would like to see them in concert. “It was one of the first crazy moves I made,” she said. “I saved up my money and went to Norway to meet them. I worked with them for several years booking them into arena tours as their production coordinator. People call you crazy right up until you’re not.”
- More coverage: Venture capitalist who launched a fund while homeless to keynote Innovate Raleigh Summit
About 2011 and 2012, she said, she became curious about the startup world and venture capital. “I had started a music magazine and was really broke,” she said. “But I did a lot of research.”
Breaking down the barriers was not an easy task. “I didn’t have a one-on-one in person meeting with an investor for two years. Every thing I read said investors want a vision, a thesis, and an edge. That’s what I have.”
Just a year and half ago, she said, Backstage Capital had six or seven people and now has 20, and “everyone on our team came to us,” she said. “One by one, people came to me individually.”
At Backstage, which has invested in 10 companies that presented at prior Black Wall Street pitch events in Durham, “We look for underestimated founders. Many touch on a personal pain point.”
If she has a “secret sauce,” she said it is “Authenticity. I genuinely don’t mind if people don’t like me. It’s OK to be myself.” Yet, she admitted, “It took until this February, at 37, to find out where my baseline was. It helps me walk against the wind but try not to knock things over.”
Establishing Backstage Capital and herself in a venture community not oriented toward women, blacks or gays was not easy. “I’ve a lot of experience being the only ‘whatever’ in the room,” she said.
In addition to the new fund, which is specifically oriented toward investing in black women startup founders, Backstage is starting accelerators in four cities, with more to come. The first three will be in Los Angeles, Philadelphia, London, and another to be announced next week.
Only 2 percent of venture capital currently goes to black women founders, she said, so “It’a about damn time” for them to have more options. Each year we’ll invest in five or so women. You’ll see the first two announcements by the end of the year.”
It took a long time and much discussion before Backstage decided to launch the accelerators, she added. “We had to do it a little different. We didn’t want them to come out cookie cutter. We won’t focus on demo days the way a lot of others do.” Sometimes, she explained, a program of three months might spend half the time getting companies ready for a demo day. “It’s distracting,” she said. “We want investors to spend time with companies on a rolling basis, getting to know them.”
She said the accelerators will be tolerant of founders who don’t quit their day jobs and that 50 percent of the six companies accepted at each need to be from the city where the accelerator is located. They won’t necessarily have the same curriculum in each city or for each startup, though “We might include some secret sauce things.”