What is Giving Compass?
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Giving Compass' Take:
• Backstage Capital is a small LA-based firm that intentionally invests in underrepresented entrepreneurs who don't necessarily have access to funding or networks that white founders traditionally have.
• How can more investors fund entrepreneurs of color? How will diversifying an impact portfolio strengthen the social and financial returns?
• Read about this impact investing approach to support diversity and economic inclusion.
In a sector where black women receive only 0.2% of all funding, Backstage Capital overwhelmingly — and intentionally — backs underrepresented founders. 72% are people of color; 62% are women; 44% are women of color, that most under-funded of groups; and 12% openly identify as LGBTQ.
The L.A.-based firm is relatively small. Its two funds total around $5 million — “Andreessen Horowitz’s Christmas party budget,” jokes Arlan Hamilton, founder and managing director. But it’s growing fast.
And speaking of mega-firm Andreessen Horowitz, Backstage has its blessing: cofounder Marc Andreessen is an investor in both of its funds. Other big-name backers include Slack’s Stewart Butterfield, known for prizing diversity in his workforce, and Ellen Pao, a new investor and advocate for gender equality.
In most cases, Backstage invests between $25,000 and $100,000 in its portfolio companies. Many of the entrepreneurs backed by the firm don’t have access to traditionally white, male networks other founders rely upon for early funding.
“I think there’ll be some more tree-shaking,” she said. “I’m bracing for that. I hope it causes some positive changes from men who are watching, who can be better. I think in a lot of cases they’re not trying. I do see some people getting the message. I’m not going to throw a parade yet.”
Read the full article about investing in women of color by Clare O'Connor at Forbes.