• Heartful Academy

From homeless and broke to celebrated Venture Capitalist

Today, Arlan Hamilton is widely known in the American investment community. She is the Founder & Managing Partner of Backstage Capital, which has invested in 130 tech startups run by underrepresented founders. Her book, It’s About Damn Time, came out in 2020 and already has an impressive 92% of reviews on Amazon being 5 star reviews. Arlan is also the podcast host of her own show, Your First Million, that has put out more than 50 episodes during the first year. Over the past couple of years she has given 150+ keynote talks, and, in 2018 she was the first Black non-celebrity woman to be on the front cover of the prestigious FastCompany magazine. Among her backers are iconic investors such as Marc Andreessen and Chris Sacca, and today Arlan can pick up the phone and get a hold of almost anyone she wants to speak to.

But let’s go back to 2012 for a moment. Back then, on December 12th to be precise, I had my first communication with Arlan. I had asked on Twitter if anyone knew a good video producer, and Arlan responded that she might know just the right person. It turned out she did, and we ended up working with the person that Arlan recommended. That is typical Arlan, I came to understand: always willing to help, always happy to make intros, and a great networker.

A few emails later Arlan shared her big dream with me: to become a venture capitalist. She had no financial background, no college degree, and not a dollar to her name - but what she did have was endless curiosity, an open mind, a kind heart, grit galore, and an astonishing memory. She started to ask me questions about startup investing, and to brainstorm creative models for getting started. Some of her questions I could answer, others not. Then she would circle back to me when she had the answer. We had never met in person but I found myself developing a mutually inspiring relationship with Arlan over the next couple of years, as we exchanged emails almost on a weekly basis. Gradually I came to know that Arlan’s personal life was a mess, and soon after, things went from bad to worse. By summer 2013 Arlan wrote to me that she was now homeless. We scheduled a Skype call, and she dialed in from a Starbucks.

Our dialogue always revolved around startups. The startups that Arlan would like to invest in, when she had the money. She asked my opinion about them, and if I knew any investors that could be interested. Arlan also told me about a venture of her own, and I shared about the startup I was running at that time. Me sitting in a fancy office in cosy Copenhagen, privileged and all, and Arlan being homeless and broke somewhere in the US. Nonetheless, when we communicated about startups we were totally on the same page, and I became impressed by the stamina, insights and empathy that Arlan always radiated.

To get some income and keep going with her big dream, Arlan found a job in the music industry, where she had worked before. She became a tour manager for some very famous musicians. This could have been a fine enough career, but she was determined to make a real difference to the underrepresented founders that did not get a fair chance in venture capital. She now calls them underestimated founders.

In the US, 90% of all venture capital goes to white male founders, despite them only representing 30% of the population. When it comes to Black female founders Arlan was saddened to discover that they only get 0.2% of the funding, which basically means that they are totally ignored. Arlan wanted to change this. But she needed to find investors who would back her. This would turn out to be an intense, uphill battle for the 3 years that followed. But not in vain. Arlan eventually succeeded, and is now playing an important role in driving forward the necessary changes that are happening in the world of investing.

For this to become a just world we cannot exclude and discriminate against women, people of colour, LGBTQ and other underrepresented founders any longer. We need all talent to be activated for the good of People & Planet, and research shows that founder teams with diversity outperform their peers. “Just think of the NBA before versus after integration. It’s not the same game!”, Arlan points out. She herself identifies as a woman, as Black, and as LGBTQ, so to her this is not just business - it’s personal.

Some of the questions we asked Arlan to address during this Heartful Academy session:

  • Besides morally being the right thing to do, can you explain to us why more investment should go to underrepresented founders? Why do you think they are underestimated?

  • How did you decide that this is your mission? Without financial background, and without money, didn’t it seem unrealistic for you to take this on?

  • What was the hardest part of the journey? Can you share with us some low points, and how you managed to move on from there?

  • What is your formula to overcome self doubt, and to keep going, even when 100 people with impressive track records have said “no” to you?

  • How would you say that Backstage Capital is different from other VCs, apart from the focus on underrepresented founders?

  • What drove you to write a book, and what is the key message you want to share?

  • Seen from your perspective, will Black Lives Matter make white people wake up, realise their unconscious bias, and do something about it? Do you see a future with equal opportunities for everyone, and without systemic racism?

  • What is next on your journey, and how can people who want to support you and your mission get involved?