Diversifying Silicon Valley with Arlan Hamilton

founder of the Backstage Capital Fund. Breaking into Silicon Valley isn't easy, especially for a black woman in the United States, and an ordinate share of industry funding goes to white men. Hamilton was living in Texas working as a tour manager for musicians like Tony Braxton and Kirk Franklin, and then she got turned on to venture capital. I was thirty thirty one, and I started getting the bug a little bit, just seeing it here and there, learning a little bit

here and there. And I did what I do when I get really interested in something, and I just devoured information because as broke as I was, you can't take away from me that ability to learn. Hamilton was relent bus. There were times when she didn't have enough food, and at one point she was homeless, but she never wavered. I was up against so much and it almost seemed impossible, and in fact, many people told me it was impossible,

and many people laughed me out of rooms. But in twenty fifteen, she created Backstage Capital and Extraordinary Achievement and began her mission to invest in underrepresented funds and founders. I was talking to founders from all over the country who were building amazing things. And I don't think that the current investors that are out there would meet these founders, would even know where to find them. And that's why I knew for sure I needed to build this fund.

I'm Anita Hill. This is Getting Even, my podcast about equality and what it takes to get there. On Getting Even, I speak with people who are improving, are imperfect world, people who took risks and broke the rules. In this episode, Arlen Hamilton and I discuss how she achieved immense success in Silicon Valley, all the while challenging a system that excludes women, people of color, and members of the LGBTQ community. There are some real basics that I want to hear about.

It's sort of teach us a little bit about financing

and venture capitalism one oh one. What is a venture capitalists? Well, a venture capitalist is someone essentially who takes a little bit of their money, but mostly other people's money, and that can be pension funds, could be high net worth individuals, family offices, etc. And they take that money and their job is to look for outstanding individual companies that are private and at different stages and hopefully turn that portfolio of investments into more for their limited partners, who are

the ones that I just listed. And so their job is to hopefully see into the future a little bit and to make some really interesting bets. So you have to be a risk taker and you also have to be patient exactly, and I have an incredibly high tolerance for risk. And I also think in decades, not in quarters, and so that's part of what has made it possible for me to not only work in this industry, but to innovate within it. Wow. Well that's our first lesson

thinking in decades, not in quarters. So you also have to learn some lingo. I know that there are certain terminologies that are out there that people refer to, like angel investing and impact investing. How did you get familiar with the language of this kind of enterprise. I read

a lot. So I was in Parland in Texas, which is part of Houston, and I was thirty thirty one, and I started getting the bug a little bit, just seeing it here and there, learning a little bit here and there, and I did what I do when I get really interested in something, and I just voured information.

Because as broke as I was, as much housing insecurity as I had and food insecurity as I had, you can't take away from me that ability to learn, and so it was it was almost kind of a power play for me too that I don't think I've ever really said. It was also this way of remaining in

control having this information. So I thankfully had access to the internet, so I could read everything, you know, do all these searches and really not know what I was looking for, but kind of go through the vortex, you know, you get on YouTube where you go here or there and you just start looking. And then I would go to bookstores in the library and I would sit for hours and read. So I would just kind of learn that way, and I just paid attention to people too.

So if I learned about a specific investor that was interesting, to me or said something, whether I agreed with it or not, I would follow that lead, almost like a journalist, and I would just continue really pulling at that thread and started reaching out to people. There was a lot of curiosity. Had you been that way since you were a child? Yes, yes, my mother would tell you, oh yes.

I mean I think most children ask questions, But I was asking questions all day long from a very early age, and it was mostly what got me in a lot of trouble in school. Unfortunately. You know, when a tall black girl in the South is asking questions in school and disrupting class quote unquote, it's something different sometimes than it would be for others. But I would just question, Okay, I understand it's in the book. I understand that the books was written twenty years ago, but why is it

necessarily still the case? You know, this is me in the fourth grade, you know, looking at why is it necessarily the end all be all? Just because it's in a book? Somewhere? I challenged and questioned everything. I questioned if someone was being treated poorly, why couldn't we make it different. It's just a constant throughout my life. I also wonder if you were thinking I want to find out those things that they're not teaching us, that maybe we're not even supposed to learn, which is why VC,

you know, was interesting to you. Yes, No, you're definitely right. I just always had this sense of there's no room I shouldn't be allowed in. So if there's something that seems like it's really complex or it's for only a certain group of people, that's just a challenge to me. If I'm at all interested in it, that doesn't stop me. And it's my way of democratizing things. It's like having that information. Yeah, democratizing things means democratizing knowledge. Yes, exactly.

So when you were doing your reading, were you thinking that you were going to become a venture capitalist? Where you thinking about a career shift at all? At the beginning of it, I was reading about venture capital so that I could know how to talk to venture capitalists

once I started my own company. My original idea was to start a company in the tech space because I had always felt like an entrepreneur, and then when I learned about startups and venture capital and angel investing in all of those things, I thought, oh, this is where I have belonged my whole life, and didn't really understand it until now, and let me do the research to be prepared in these meetings that I'm of course going

to have with venture capitalists. And so it was in that research when I came across these statistics after a little while, very early in the process, and I started reading more and learning about the beginnings, and I thought, oh, okay, so I probably can get into the room because I'll make a way, but I may not be welcome and I may not be followed by anybody else if I do.

At least ninety percent of all venture capital in the United States goes to white men in a country where they make up less than one third of the country. So we got to change the whole system if I want to play in this arena. Wow. So that's a pretty big undertaking to think you having to change an entire system to be able to do what you wanted to do. But it sounds as though you were pretty clear that it was worth the risk, as you say,

you're you have a tolerance for risk. Yeah, And when I think back on it now, I mean I was up against so much and it almost seemed impossible, and in fact, many people told me it was impossible, and many people laughed me out of rooms. There was one woman who told me in early twenty fifteen, after me working on this for like four years, I told her, I'm going invest in a hundred companies led by underrepresented

founders by twenty twenty. I said that in twenty fifteen to her, she was in a place of privilege and I wanted to have a partnership with her. And she literally started laughing as she walked me out of her office and told me to come back when I was more realistic and skipping ahead just a bit. We reached one hundred investments in twenty eighteen. Right, and have you had a conversation with her? I couldn't pick her out

of a lineup. I have no idea what her name was exactly, but I will bet that she could pick you out of a lineup today. Perhaps, what are the barriers that you faced when you were first trying to start your own VC firm and you'd moved from being a founder yourself to being someone who finances. I think a major part to understand is that not only was I trying to kind of walk into a place that wasn't bill for us, which most things weren't. I was

also personally destitute. I don't mean that I was cute broke. I was broke broke. We you know, we didn't have money and it was a struggle for a long time, and every once in a while we get some money and you know, make that stretch for as long as we could. I ended up living essentially at the San Francisco Airport for a stretch in twenty fifteen and watching people walk by who I knew were investors. At the very beginning. Of course, people were brushing me off and

kind of not really paying close attention. But I was also calling out the system, and in doing so, calling out various companies and firms. And even though I had this small platform, I started getting messages both direct and indirect, that I needed to shut up. And it was coming from someone who wanted to protect me and said, we don't do that. That's not how it works here. And it was also coming from people who thought that they

could truly shut me up. They were making it very clear to me that, in their opinion, you don't go up against these titans of industry without their being a fallout. And they learned kind of earlier on that they couldn't silence me, but it did ruffle feathers and it I was just so surprised. I was honestly so shocked and surprised by it because I thought, all I'm doing is

expressing my opinion. I don't have any power here. How in the world is it upsetting so many millionaires and billionaires that are successful, mostly white men, who could put their thumb down and kind of squash me. It was crazy, but I think it just showed just how fragile things really were. You know, there's a lot of money that flows in to Silicon Valley, and there are a lot of closed door decisions that are made that affect so

many people. And I was sort of saying, you know, putting the spotlight and saying, hey, look over here, look what they're talking about, showing people like here, Okay, let me open up the blueprint for you. This is where you go, this is who you talk to, this is what this means. And if I'm able to do that without a college education, without any money, without any connections, homeless coming from nowhere, it must mean in their opinion,

they're not as special as they've made themselves out to be. Yeah, I mean so you were questioning the exceptionalism that they were trying to promote that was key to success. It seems to me that what you were doing was key to what you saw as the need for a systemic change. Yes, and so that's why you kept doing it. Oh. Absolutely. I think if people hadn't been so against me doing it, I probably would have not proceeded. I probably would have said, Okay,

I've said my piece. I'm probably gonna go over here and I'll help a few people out and raise some money for my company. But when I started seeing people raging against it, in very powerful men writing to me or having their minions right to me or do whatever, I thought, Oh, there's something more here. There's definitely something that's being hidden. We're gonna keep going. I'm glad you're stuck in there. But you had, by that time moved

from Houston to the Bay Area. Yeah. I had took a one way flight that I crowdsourced the money to get because I'd been accepted into a two week investor boot camp at Stanford and it was right before they were getting ready to like have a lot of women, you know, come out about things in Silicon Valley. But It was during a time where it was important to them to have more women represented at this boot camp, and so they took their twenty thousand dollars tuition down

to ten thousand for women. So I found my way. I crowdsourced a third of that. I stayed in an airbnb for a few days, and then after the catered lunches at the boot camp, I found myself at the airport. You were physically sleeping at the airport, yes, How did you choose the airport? I was very specific about the airport. I wanted a place that was indoors for many reasons.

I wanted a place that I thought, Okay, it's probably going to be embarrassing and I might have to explain myself a lot, but I also want to be safe as possible, and there's access to facilities, and so to me, I had to do this mentally. I said to myself, I am a traveler, the world traveler, and I've missed my flight, so I'm going to sleep on the floor of the airport tonight. And I said that to myself over and over again each day to make it possible to do. For most of us, two nights would have

been about as much as we could do. But I guess when you're determined, you can figure out how to do it. Yeah, it was a lot more than two nights, but I don't say the amount of time. I didn't count every day, but it was too long, so I don't really share it because I did have people rich people start to ask me, now, how homeless were you?

Like literally, and I'm like enough, like I don't know, Like it was fun to find out or interesting in that way, and so I just started protecting myself and saying, you know what, I don't know how homeless you This particular person needs me to be for it to be legitimate. But it was more than it needed to be, and it was for a long time, and it was alone.

After the break, Arlin Hamilton and I discuss how she created her fund and grew it using her keen instincts and abilities to recognize great ideas and the innovative people behind them. You're listening to getting even. I'm Anita Hill. I'm speaking with investor Arlin Hamilton about how she started backstage capital of venture capital fund. Hamilton backs underrepresented and unlikely founders, democratizing who gets to be part of Silicon Valley.

So were you getting the information that you thought you would need to persuade investors that there were companies out there that could benefit from their money and that they could benefit from Yes. So I was talking to founders because I wanted to know my stuff. One of the first things I learned when I learned about venture capital was the phrase that deal flow is king, deal flow being what kind of companies do you have access to,

who would let you invest in them? What are you seeing, what's the quality, etc. And that stuck with me and I said, well, if deal flow is king, I'm winning here because I'm seeing all of these companies. And I don't think that the current investors by and large that are out there would meet these founders, would even know where to find them. And I don't know if the founders would know how to get a call with the investors. So of course there's this really interesting gap that could

be lucrative. So I was having those conversations. I was letting the founders know, Hey, I don't have a fund yet, but I'm raising one. So I was kind of establishing a track record a network and also realizing, oh, I have chops, I have a nose for this too, But you were doing all of this without the infrastructure that you now have. Correct So basically what was important was the work Exactly when you were first doing your work to find investors to find founders, were you experiencing any

racism or sexism or both in those exchanges and finding founders. No, it was on the investor side, it really was. It's one of those things that it's hard to kind of

show because it's all happening behind closed doors. But I remember getting a very late night phone call, probably two thousand and sixteen, after I had raised from a few interesting people, and this person was an early investor, a man with power, and he told me, Hey, I just want to let you know that I just left a meeting, like a closed door meeting, probably a poker game or something like that, and they were talking about you, and they were representing lots of different funds that you have

to deal with, not only to raise from, but for your companies to raise from. And I want to say this as carefully as possible. They essentially put a hit on my fund. They put a no one's going to touch this fund. We're not going to let it succeed type of thing. Now, was that racist? Was that sexist? Was that very specific to meet? What was it? I

don't know. And this person was telling me, and he was giving me a heads up because he had invested in I guess he just stayed silent in the room and I didn't ask him why he didn't say anything. But you know, it is what it is, and those types of things happen. And talking to the founders, people would tell me incredible things. Women would tell me about what male investors would dare say to them. I think people in public don't say as much to me blatantly

because they know that I do have a platform. But founders will tell me that male investors have said things like, will invest in you if you don't get pregnant for the next couple of years so that you can focus on your company. You know, I've been in rooms with black women who have PhDs, who have all the chops in the world, who are generating revenue when there are some young white man who can raise ten million dollars off of an idea. And I've listened to the questions

asked of these women. I've given a quick example. There is a woman who at the time I was in my early thirties and she was in her early forties. She was an adjunct professor at Stanford. I sent her deck, her pitch deck, which talks about her company, and I sent another They're from a white man and the guy had an idea, and she had a full fledged company,

an invention with patents and was making money. And I got several emails back and with over a week's time from the people I sent it to, because I was sending it to mostly white men because that's who was writing checks, and almost all of them said, I'll take the meeting with this company, which was led by the guy, and for this company. They would say, I don't understand the market, so that I'm going to pass on this one.

Now the market this was a product that was for hearing loss, so the market is for people who can hear and for people who cannot hear. It was for everyone. So you know, those subtle things add up. I call them papercuts. You know they add up. So my reaction to all of that was creating more success for myself and for the company. You seem very secure in who you are, but I wonder if you see a number of people who are kind of changing who they are

to be more appealing. In some ways, it's code swishing or changing your personality or being something that you aren't in order to appeal to this very very limited thinking about who will be successful in business. Yes, absolutely, I've definitely seen it the entire time I've been in this industry. I see it today. I rail against it, and I often implore people not to do it. Especially in the early days. I thought, am I supposed to change the way I talk? Am I supposed to be quieter? Am

I supposed to change the way I dress? Because I certainly don't dress the part. Am I supposed to do this or that? Or even aligned myself with certain people who I don't really respect but who can get me there faster. And even if I had a small inkling of this, I would reset and say, oh, no way on Earth, because it's just going to take longer and be more difficult. But I'm going to get there, and once I'm there, I have to be able to face myself.

I've turned down lots of money, for instance, because I didn't think it was right to be in business with certain people, and so many people came before me and before us to make it, so so we should we owe it to them. We will owe it to ourselves. We owe it to the future generations not to do that. So let's they are a point where you've gotten maybe your first big VC inside or on your side, and you realize that the company's going to happen. Was it a moment or a series of things that happened that

convinced you, Yeah, it was. It was a series of things. It wasn't one big moment. We had this moment where I went from the airport to actually being able to be in business, which was in September of twenty fifteen. An angel investor named Susan Kimberlin stood up and gave me the first fifty thousand to get started after spending a few months getting to know me, not knowing about my personal situation. Another thing that does continue to stand out to me, which is Stuart Butterfield, the CEO co

founder of Slack. He reached out to me on social and he said, hey, you know, I see what you're doing. We developed a quick friendship and he made an investment and he said, you know, put my name on the deck on the presentation, put my face on there. Whatever you need. Aaron Levy did the same thing from Box. They're definitely in this story some really interesting upstanding men,

especially that I would have been surprised by. But the thing is they were founders who were successful, massively successful, who themselves work their way up, and I think that they got me. They saw me as a founder, they saw me as an entrepreneur more than anything, and maybe they saw that the system didn't need to be changed. Yeah, I believe so. So you have Backstage Capital, and how did you come to name it Backstage Capital? My mother, missus Arline Butler Sims, she came up with her name.

I just mentioned to her one night while we were in Periland and again broke. I said, I had this fund I'm putting together and it needs a name. And she didn't ask me, how are you gonna have a fund that doesn't make any sense? She said, oh, let me think about it. And she came back within ten minutes and said, how about backstage because you work with musicians on tour, you know, for concerts, and you help them get on stage, and maybe you can do that

for the people you're working with here. And I thought, well, that's brilliant. I'm not gonna let her know how brilliant it is. But I said, oh, that's great, that's good. And then you know, every other week she's asking me, where's my fifteen I came up with a name, where's my fifteen percent? Well good, She'll keep reminding you. Yeah, let's talk a little bit about the founders that you have helped. You call the people you support underestimated founders.

How do you choose them? It's a gut reaction. It is a shift in the atmosphere when I see it. There's something called pattern matching right in VC and other places where a lot of times these are men pattern matching for Zuckerberg or Bassos or whomever. I'm doing pattern matching two. It's just a different pattern. So I'm looking for someone I call being hungry, not thirsty, and I want to back that person who can combine that with

an incredible vision. If I can find something that is like game changing, and it would take me a decade or more to figure it out on my own, you're going to have my attention because I get to live through you. In that moment, my life gets to be fuller. In that moment, I have the best seat in the house. To innovation and you can want to grow exactly. Yeah, do you do something different from what other vcs do for your founders. I've had early conviction for a lot

of people. I've seen the potential really early for a great deal of people, and I think that's what you're seeing now is like the fruits of that. And whether I had money at the time or not, I invested my belief in them. I believe that people are so capable of so many things. I represents hope for people that their current situation doesn't have to be what they are for the rest of their lives, or there is

more for them. Yeah, I believe in them, which you encourage the people to throw the route that you do. What advice could you give? My thing is like, it's not necessarily the big deal is to become a venture capitalist. I never thought that that was the big deal and

I still don't, right. The big deal is that over the next few years, people are going to become founders, and they're going to become entrepreneurs and start companies which are going to be amazing, and there are also people who will be able to invest in those companies as part of the crowd, not necessarily being a venture capitalist, but putting one hundred dollars fifty dollars a thousand dollars of their money into companies. So I say, anybody can

be an angel investor. And I love angel investors because in groups, they are very powerful, and they're very savvy, and they have a perspective that most venture capitalists will never have. They just won't have that. So if you want to get into investing, there are many, many ways to do it, but just to know that, like the world is your oyster. When it comes to this, there's nobody standing at a gate telling you, Okay, you get to go do this as you're from this city, or

you went to this school, or you're this race. There's no one there. It is yours for the taking. And just be intentional about the research and say why why would I want to do this? Is it because I think I'm going to get rich really fast? Because you won't.

This is not a magic peal. But if you have conviction around certain things, if you have skill, if you have curiosity like I did, anybody can invest their own money and be a part of this revolution and be a part of innovation and a part of the future. It belongs to every single one of us. I really

love your story. But I'm sure there are people who are out there who will argue that you're the exception, and you are, but they will also say that we can't expect that everybody's going to be able to do this, And it sounds to me like what you're saying is that you don't want everybody to have to go the route that you went. Oh no, nobody should have to. I have invested in personally in about twenty five funds now over the past three years that have a similar

mandate and thesis to Backstage Capital my firm. Twenty four of them did not exist in twenty fifteen when I started Backstage, which means that we have in some way influenced dozens, if not hundreds of new firms to pop up. And that's amazing. And I know them because I've invested in them. Not each of them had to go through what I did. There's a little bit easier, to call it loosening the pickle jar. It's a little bit easier each time. So I think that there's a lot to

look forward to. We have some more surprises up our sleeve. Oh god, I'm sure you do, and I'll be curious to hear about them. The name of the podcast is getting even. How would you define parody in venture capitalism?

Oh well, I mean, I think the idea of walking into a room or being on a cap table, which is like a list of investors and a fund, being in a deal and it just looking like the demographics of the country, you know, I think that would in itself be parody, that it was effortless rather than so labored just to get into the room, just to get into the deal, just to have exposure, because it just feeds on itself over and over again. The PayPal mafia then goes on to invest in Facebook, then goes on

to invest in this, and that feeding onto itself. I just want to see that more spread out, more democratic. Absolutely, why should people outside of Silicone Valley care about venture capital firms? So many of the biggest companies in the country, in the world are VC backed, and there were very specific people who made a decision to invest in them, who win off of their winds, and then there are very few people who are those founders who are backed.

We have the opportunity to change the face of innovation. To add to it that in itself. If you're talking about generational wealth, you're talking about today's wealth, like that's really important too. We talk about generational wealth, but I talk about right now. You also talk about influence and power comes from money a lot of times, and I honestly believe that if there are more rich black people, for instance, I don't think we would be seeing public

executions of black men on television. And then down to the other side of the spectrum, which is there is a video that many of us have seen of two black hands under a soap dispenser, and the soap dispenser, which is like automated, does not recognize the black hands. This is happening in autonomous vehicles and other types of things. Now. I don't know about you, but I want the cars to see me at the sidewalk when I'm walking across the street. I want autonomous vehicles of the future, which

there will be there already are some. I want them to see me. And the reason that these things happen is because who was in the room when it was being built. We need to be in the rooms when this is being built. We need to be making decisions. A lot of the decisions come from the founders and from their backers, and so you just wonder if there had been a dark scanned person like myself in the room, who could have been in there, who would have asked,

have you tested this for all scan colors exactly? Do you have questions for me? Ah? Oh my god? How much time do you do? I have questions for Anita here. Do you believe that you've been able to understand the impact that you've had on women black women, especially over the decades, or does it feel a little detached from you? It is who I am, And I like your phrase hungry not thirsty, because the more I hear, the hungrier

I get. I would say that I probably started out more detached because it was just so odd for me. Right now, I feel completely responsible and I'm happy to be here. I never would have seen myself as a person to do podcasts, But when someone explained to me this is how you get ideas out, and this is how you can get an idea about what equality looks like and where it needs to be examined and pursued in the way that you're doing it, then I was on, you know, I'll figure it out. I mean that'd be great,

but I'll figure it out. The more I work and I think and I hear from people like yourself, the hungry yet and the more I feel that it is a part of who I am and always will be incredible. I love what you're doing. I love the work. I love the way that you've figured out, You've carved out exactly where you wanted to go with it, and I love the idea that, just in terms of what this program is about, you are a be the change story.

I like to say people talk about the change, what they want to actually live it and be it and do it is very exciting. So I want to congratulate you on that. Can I just say it is surreal for me to hear those words from you. I met you once a few years ago, just very very briefly, and the only thing I said to you was thank you because of your bravery and your outspokenness and being a blueprint for so many others. So I appreciate that. Well, thank you, and I know I don't have to convince you.

You will always be who you are and we are so grateful. Thank you very much. Arlin Hamilton's story shows the world the value of including people who are left out. Hamilton has navigated through hostile systems to identify and invest in the products that will further social justice. Her book About Damn Time is a guide to how she found her calling and achieved her vision. As Hamilton said, we stand on the shoulders of those who come before us.

To stand on Hamilton's shoulders is a particularly special perch. Through example, she shows the way for each of us to be part of the change we want to see. In the final episode of Getting Even, I speak with two of my friends and co conspirators in social justice, law professor Emma Coleman Jordan and feminist scholar Beverly Guyscheftall. We talk about the value of friendship and creative collaborations. I don't think I've ever said this to you publicly

or even privately. Meeting you in nineteen ninety two, when I saw you standing up there talking, I said to myself, one of these days, I'm going to speak publicly about my experience with sexual assault for the first time. I call myself for Survivor. Getting Even is a production of Pushkin Industries, and it's written and hosted by me Anita Hill. It is produced by Mola Board and Brittany Brown. Our editor is Sarah Kramer, Our engineer is Amanda kay Wang,

and our showrunner Issha Matthias. Luis Gara composed original music for the show. Our executive producers are Mia Lobel and Letal malad. Our director of Development is Justine Lane. At Pushkin thanks to Heather Fane, Carly Migliori, Jason Gambrel, Julia Barton, John Schnarz, and Jacob Weisberg. You can find me on Twitter at Anita Hill and on Facebook at Anita Hill. You can find Pushkin on all social platforms at pushkin Pods, and you can sign up for our newsletter at pushkin

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