Anna Hutcheson
Our Founders Fireside Chats are a great way for students to hear from founders and visionaries, but they’re also a great opportunity for us to connect with founders in our community. The first Fireside Chat for the fall semester was held in October and featured Arlan Hamilton, Founder and Managing Partner of Backstage Capital. The conversation was moderated by Ramona Ortega, Founder of My Money My Future. We’re big fans of both these awesome women, so here is a recap of the event for you to enjoy:
Ramona introduced Arlan and commented that, “She is a prolific speaker, author and hero for so many of us who are founders and particular tech founders in the ecosystem.” Ramona’s company My Money My Future is part of the Backstage family, and she was fortunate enough to meet Arlan in her early days.
Arlan started the conversation by telling us a bit about herself. “I never expected a room would know me.” She was born in Mississippi and grew up in Texas. When she was in her thirties she struggled to figure herself out concretely, Arlan states, “I had really cool gigs [and] I was working in live music with different artists and had to work my way up over [a] decade to that position, but I was still very curious about the startup world for various reasons.” Arlan learned about the disparities in venture capital and startup resources, noticing that the majority of funding was going to white cis-gender men. She didn’t think that made much business sense; it was leaving so much of the population out of the equation. This is when she decided to try something herself and take what she’s learned about life and apply it to venture capital. The idea was to invest in 100 companies owned by underrepresented founders by 2020. She wanted to prove others wrong.Arlan surpassed her goal: “We have invested in 150 companies, we reached 100 by 2018, and [they are] all led by women, by people of color, and/or LGBTQ, which I am all three.”
Ramona said to Arlan, “You have broken so many rules in this industry, not only not having come out of a top tier school and the normal trajectory of silicon valley men, just the fact you are a black woman, a queer woman and you’re from the South and so many things you have broken the mold for….I think [this] is what you also see in so many founders. A lot of the founders you invest in don’t come from that mold. That’s the blessing in what you are doing...it really has been the underrepresented or underestimated founder. “
She then asked Arlan to talk about any common threads she looks for when it comes to investing in companies, and has she always looked for the same thing. Ultimately, Arlan revealed that things haven’t changed very much when it comes to her investing. “When you look at companies at an early stage, you have to trust your gut and look at a complete list of things: you’re not just looking to see if they are underrepresented, you’re not just looking at something about their story [that] touches you because we [are] only investing in 2% in what we see and we’re seeing thousands of companies.” It is also a lot based on instinct.
Ramona encouraged Arlan to talk about financial freedom. “For me, it's a combination of both individually and as a group. Buying a car for mom at 39… I bought my mom a really nice car and thought about all the cars we had and didn’t have. I don’t feel like I bought that car, the work my mom did [for] the first 39 years bought that car combined with the work I’ve done. She is already building a generational wealth and enabling me to be able to do what I do. I don’t have children, but I like the idea of catalyzing so many people that those seeds are planted in every which way and that the individual is empowered.” Arlan explained. She continued to say that financial wealth is about “creating something for your offspring to have something. It is also about you today and you in the next few years, and getting to enjoy yourself and your life today... owning success and being happy about achieving something small for yourself.”
Ramona then asked what is on the horizon for Arlan personally in terms of her own brand. Arlan said,“I’m going to be the person catalyzing.There is not much I can do on my own, but I can take, earn, build and then put that right back into the soil. There is no stopping us. Representation and amplification of our work is so important.”
Next, Ramona asked Arlan to share some of her practices and advice for staying healthy over the course of her work. Arlan laughed and said, “People associate me with naps because I no longer have vices, I don’t drink, I guess my vice is food. I love a good meal and COVID has not been helping with that. You need to have the understanding that you have permission to take care of yourself and you have permission not to stress out to the max, work overloaded. exhausted, drained of all energy and creativity…. {you are] still considered a real founder if you do that and don’t do that to yourself, there is a hustle culture in startup land that is toxic and dangerous and is not rooted in any sort of logic. Take naps!”
Arlan fielded several questions with the audience and below are some examples.
A question from Mahmoud: “Can you talk a little bit more about instinct, what does that mean to you, where does it come from, what influences your instinct, is it more of an emotional response to conversations or certain specific green flags you see?”
Arlan mentioned that she was going to give a short version answer for this question. She talks about this topic on a deeper version on a podcast by her friend Beta Luca, of which she was a guest on. Arlan states that instinct is “A series of trial and error helps you build an algorithm of starting to trust your own judgement. Take a little bit of risk, put yourself out there, and be willing to be wrong. [You can] start at any age and you can start saying I’m going to start making decisions and keeping track of how those decisions pay off, and who do I have in my orbit and my world and what opportunities I say yes or no to and what I decide on.”
The next question was from Venetta: “I love the Backstage Crowd, do you encourage upwardly mobile people of color to start syndicates in their communities? What are the disadvantages of platforms like this.?”
Arlan responded, “If you are not doing this full time like we are, I would not suggest to setup a whole syndicate sort of website [or] a whole platform... it is expensive for us, takes several people to run, and a lot to take on, [especially] if you don’t have a fund already. You can start an angel group. If you can invest already, either join an existing angel group or angel syndicate or several..”
The next question was from Keith:: “A warm intro is considered the gold standard as the best way to get access to investors you don’t have personal relationships with. Without those connections directly can you comment on the best ways to cold connect with investors for fund raising?”
Arlan explained that they don’t have a warm introduction policy at Backstage. You can go directly to backstagecapital.com and you can apply for office hours. They have rolling office hours and group office hours. She added, “You don’t have to know anybody at Backstage in order to talk to us. A lot of funds have events, attend their events and panels to get to know them better, research them.”
Through a random drawing, we gave away three copies of Arlan’s book, It’s About Damn Time. The winners are Ewelina, Tina and Norval, students and faculty at CCNY. Norval shared with us a photo of him with the book when he received it.
