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Why Arlan Hamilton Created A $36 Million Fund For Black Women https://ift.tt/2IIJRu0 Recently Arlan Hamilton, founder and managing partner of the venture firm, Backstage Capital announced via Twitter and the United State of Women conference that their newest $36 million fund will invest exclusively in black women-led startups and entrepreneurs. Hamilton’s firm specializes in funding non-visible groups within the tech sector like women, people of color, and LGBT founders and has invested more than 40 million in over 80 companies led by underrepresented founders. Black women start-ups and entrepreneurs are leading the pack when it comes to being marginalized within tech funding, only receiving 0.2% of all funding and less than 3% of VC dollars in 2018.
Hamilton and her team at Backstage Capital intend to change that percentage by introducing the $36 million fund which will invest in Black women founders $1 million dollars at a time. The decision to create the fund was simple according to Hamilton, there is simply not enough funding being given to black women founders although they are the fastest growing group of entrepreneurs and Hamilton believes it’s about damn time for that to change. I spoke with Hamilton about her motivation behind creating the fund and her plans to expand Backstage Capital. Dominique Fluker: You've announced recently that your new fund will invest $36 million exclusively in black women-led startups. What led you to create this fund specifically for black women startups and founders? Arlan Hamilton: The numbers speak for themselves. Black women are invested in .2% of the time, so one-fifth of 1% of the time in venture capital a black woman receives an investment. When they receive that investment, they receive on average $36,000.00 versus $1.3 million that their white male counterpart would receive. These numbers are from 2012 to 2014, and they've gotten slightly better over the past few years, but not fast enough. I think it's time that there is a fund that invests a significant amount of money in black women, bullishly and unapologetically to move the needle and to set an example. Fluker: Discuss the impact that you hope to make with this new fund. Why it is important to invest solely in black women founders at this time? Hamilton: While Backstage Capital will continue to invest in several categories of underrepresented founders, including women across the board, people of color no matter their gender, and orientation, the focus of the $1 million investments into black women is a personal mission of mine. I also believe that black women are going to make me rich because they are gravely underestimated, and they are creating companies and running companies of massive scale that is being overlooked and ignored. I think that I am able to see two and three years into the future at any given time when it comes to the way that venture works, and right now I see that there are many black women who are being underestimated in this very moment and who by supporting them and backing them with a $1 million check, I will reap the rewards and the benefits of that in two to three years and beyond. Fluker: In a sector where only 0.2% of black women are receiving funding, how can other VC firms do their part to change those percentages? Hamilton: They hopefully will look at funds like Backstage Capital, Cross Culture, Monique Woodard's funds, Charles Hudson's fund, Shontel Pierceson's fund, Kesha Cash's fund and so on and so forth and look at the trend and look at how those funds got in so early and now are backing some of the most interesting, intriguing and successful founders that we're seeing right now. They got in five, three, two years ago when no one was paying attention, and today we're seeing what those companies are becoming. A great example would be Morgan DeBaun at Blavity who Monique Woodard backed early. Another example would be Jessica Matthews at Uncharted Power, Jewel Burks at Partpic, and so on and so forth. Now, if I can continue to help other funds meet these founders early, then we all win. The founders win, the other fund managers win, and Backstage wins. I think that even if you're not meeting them through me, that hiring black and brown women today as analysts, as apprentices, as associates, as partners are the only way to move forward in a quick manner. Anything less is lazy, obtuse, and losing. Fluker: What are your plans to expand Backstage Capital and continue to back underrepresented founders? Hamilton: In addition to announcing our $36 million history-making fund, we have other announcements in store throughout the summer that will continue to show Silicon Valley that it's not only possible to back underrepresented founders in a meaningful way, but it is paramount. Both of those announcements I think will send waves through Silicon Valley just as this fund announcement has in the past couple of weeks. Business via Forbes - Entrepreneurs https://ift.tt/dTEDZf May 23, 2018 at 11:39AM
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