SXSWORLD

4 2 S X S W O R L D | M A R C H 7, 2 0 1 9 | SXSW.COM When Backstage started in 2015, Hamilton's plan was to invest in 100 high-quality startups — all run by women, LGBTQ+ people, and people of color — by 2020. She reached that goal in May 2018. By then, Backstage had more than 20 employees and had invested more than $4 million in those 100 companies — whose products range from food and clothing to apps and software — with the majority of those investments being between $25,000 and $100,000. Backstage had also established a second $36 million fund, set up a mentoring program, and built a network to offer a support to entrepreneurs who had interesting projects but didn't receive funding. "We invest in less than three percent of what we see," Hamilton explains. "All of it mat- ters, not just the people we're backing. When I see that Delane Parnell of PlayVS (a league for high school Esports) raised $30 million, I remember we missed him. That haunts me. But I don't say that's a loss. That's a win for Backstage. All boats rise." It's important to Hamilton to maintain good relationships, even with founders she chooses not to invest in. She knows that entrepreneurs — particularly those who are not straight white males — have formed a community and share information through back channels. She wants to be seen as authentic, the sort of person who does more than puff herself up on Twitter or write self-aggrandizing articles. That authen- ticity, she believes, is why people keep reaching out to her and to Backstage: "People feel like they're being treated with a certain level of respect." Ever since Backstage launched, Hamilton had been asked to start an accelerator to offer new businesses more support beyond the initial capital. For a long time, she demurred. But then she started working with other accelerators to help them reach a more diverse pool of founders (more than 90 percent of venture funding recipients are straight white men), and found that they weren't moving as quickly as she would have liked. "They haven't made it as much of a priority as they should," she says. "It's an HR move — something they think they need to do and be better at — but they don't necessarily know why." So she decided to give it a shot herself. Backstage began taking applications for its own acceler- ator program late last year with Microsoft and Mailchimp as its launch partners. There would be four three-month sessions in four cities, staggered throughout 2019. "We wanted to be different," says Hamilton. "We wanted to see what we could really accomplish." Instead of building toward Demo Day, Backstage's accelerator would help each company reach a specific milestone — a first pilot B2B customer, the first 1,000 signups, the first half a million dollars. Hamilton expected 800 applications for the 24 spots, consistent with Backstage's history of funding three per- cent of applicants. Within the first five weeks, Backstage had received 1,900. Hamilton and her partners decided to shut down the process because they couldn't accept any more. Then they had the difficult task of narrowing down those 1,900 to 24. "The quality was so, so high," Hamilton says. "There's a certain group of people that, on another day, would have gotten in. Next year, they may still get in. We made sure that everyone in the top 100 under- stood how valuable they were." As soon as Hamilton finishes her presentation at SXSW, she'll be flying to Detroit for the launch of the first session of the Backstage accelerator. But she's still not done. Over the next few years, she wants Backstage to become independent of outside investors. She thinks it will be able to manage half a billion dollars. She has also launched Backstage Studio, a media company. "Think about why certain white men are so confident," she says. "Growing up, from the age of three, they're seeing Batman, Superman — all these superheroes who are white men. I want to embrace rep- resentation through media." Over the next two years, Backstage will be producing videos and podcasts about its founders and Hamilton herself, to show young people that women, LGBTQ+, and people of color can be suc- cessful entrepreneurs themselves. "I'm often called racist online," Hamilton says. "But I'm an idealist. My ideal world is where we're all working together and equal — not a world where one group has more power. With a more level playing field, everybody wins." Arlan Hamilton will be a Featured Speaker in the Entrepreneurship & Startups Track on Monday, March 11, at 5pm. See schedule.sxsw.com or SXSW GO for details. continued from p.40 "My ideal world is where we're all working together and equal — not a world where one group has more power."

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