Originally published on FastCompany.com here by AINSLEY HARRIS
When venture capitalist Arlan Hamilton started writing checks three years ago, she promised herself—and the underrepresented founders she planned to back—that her firm, Backstage Capital, would make 100 investments by 2020. Now, two years early, Backstage has achieved that goal. As of this week, the firm has invested in 100 companies with at least one founder who is a woman, person of color, or LGBTQ.
Across the industry as a whole, in contrast, startups led by women accounted for just 2% of the $85 billion in venture dollars raised last year. For founders of color and founders who identify as LGBTQ, the percentage was even lower.
Backstage’s outsize ability to source more diverse deals is a direct result of the firm’s overarching philosophy, says partner and chief of staff Christie Pitts. “We’re not trying to check a box by investing in diverse founders; that’s what we lead with. It embodies who we are as an organization.”
With this 100th investment, Backstage has exhausted its first three funds, and will turn its attention toward the new $36 million fund focused on black women founders that Hamilton announced last month. Checks for the Backstage 100 ranged from $25,000 to $100,000; each check in the new fund will be for $1 million.
In Backstage’s early days, skeptics questioned whether Hamilton’s 100-startup goal would be feasible. “She got a lot of feedback from people concerned that there wouldn’t be enough deal flow,” says Pitts. “Arlan felt that to be kind of a miss in the industry.”
Today, Backstage 100 portfolio companies range from Mars Reel, billed as the “ESPN for millennials,” to Tinsel, a maker of wearable tech jewelry. Of the 100, 68% include a woman founder, 62% include a black founder, 8% include a Latinx founder, and 13% include an LGBTQ founder.
The firm has not yet had an exit, but Pitts is confident in the Backstage 100’s future prospects. “In the next few years we expect that unicorns are going to be led by diverse teams,” she says. “It’s only a matter of time.”
