Advancing Equity in Silicon Valley: In Conversation with Arlan Hamilton (Backstage Capital) and Aniyia Williams (Black & Brown Founders) | Disrupt SF (Day 1)
2:42AM Sep 6, 2018
You know, there's a pipeline problem and they say, Well, you know what? There isn't a pipeline problem. It's California. Come on. So let's talk about this issue and actually talk about some fantastic solutions. That's why it's a myth. And that's why we can actually talk about diversity and inclusion. today. With arlan Hamilton and Aniyia Williams discussing how black and Latinx founders can take a bigger share of Silicon Valley's money here with TechCrunch writer Taylor hitmaker big round of applause everybody.
Hello, and welcome. Like Mike said, Today we're going to be talking about money, but talk is cheap. So instead, we're going to talk about what happens when Silicon Valley stops having the same diversity one on one conversations and starts putting its money where its mouth is. Yes, I saw this mass exodus when the next inclusion, they're like, oh, not for me. That's great. They don't know what they're missing. But
I love the people that have stayed. Thank you very much.
All right. We'll make it worth your while. It's true
that this is gonna be great. Are you kidding me? Who needs Ashton Kutcher and I'm sure that's great. Whatever.
arlan I love your shoes. I saw them on Twitter yesterday
when you were little. Yeah, Nike, Nike, Nike. Nike got those Nike's on buying Nike from now on
Well usually I would do like a little bit more intro so everyone can get familiar about your background but I know for a fact that you to know each other well and he was like each other a lot yeah. said I want you to do each other's intros what Oh, she's not gonna ruin your whole day.
She you know, okay, well,
I'm going to tell my version of Arlan's story.
Well, I mean, honestly, arlan and I, we met in 2014, 15
back in the day when she was just getting backstage off the ground.
And she's originally from
this is a test
Oh, no, this is like a dating south
in the south some place Mississippi into sippy grew up in Texas. And,
and she and I have had a very similar shared journey in building our respective things. And it was a great bonding experience for the two of us both with like us, trying to gather the resources that we needed on either side of the table to build the things that we thought really needed to exist
and Arlene's awesome. That's my intro of arlan. Thank you. Oh, yeah, she runs a VC firm to do that
to around backstage capital started in 2015. Officially when I met a Nia around the same time we invest in women, people of color and LGBT founders. We have invested in 100 of those companies since 2015. And we're not stopping anytime soon. A Nia is from the East Coast
okay. And Nia is a founder of a hardware company and fashion company called tensile that we have invested in there one of the first eight investments that we made and so we have known each other for a while our first meeting that we had a Nia was pregnant and had been raising while black while woman while pregnant and was kicking butt and we bonded I was not pregnant but I did appear to be so we had a that going for us and you may know a Neil from
a story where she delivered her own baby at home that happened. Yeah, that did happen. So look that up Google that if you don't know about it, and since then, she so she runs tensile, which is an amazing product that she can tell you more about. She also runs black and brown founders, which is a movement, a nationwide movement to get more access to education and camaraderie and all sorts of resources and tools into the hands of black and brown founders and aspiring entrepreneurs. And I just think that what she's done there has been really remarkable. And we now have a new project that we're working on this trail.
Let's get right to it. These are great intros, I think you both know if it was like a dating show, where you have to, like, guess the other person's like, favorite cereal, or we met last probably,
I know, I'm totally the overachiever type two. So I'm like Taylor and need my gold star now. Okay. It's backstage. got off a for sure. Give it to
you. Cool. Yeah, let's get right to it. You all have big news? Let's
do yeah, I want to make an announcement
that so our team is here. So part of our team from backstage capital. If you're at backstage capital, please raise your hand. Oh, yeah. Half the crowd from backstage capital. Thank you. I think you look us up at backstage capital. com. By the way, we are making the announcement I'm just sharing the news. It really has been an effort among all of our crew members and our new team members. As of today, we have launched backstage accelerator so we are now an accelerator
with the app. Yes,
so so excited about it. So proud of it. And we're going to launch in four cities next spring. And those four cities include Los Angeles, London and Philadelphia and Philadelphia's when were Nia comes in because she has been inspiration Council and putting together that team and and actually bringing us there so we have a fourth city that we're going to launch as well and that will be crowd voted so you can go you know, it's really good would be really good. If I knew the website I don't know their website. We have all these people here. And I don't know the website backstage. com slash accelerate girl. Yes,
by a nice
I reviewed battalion.
And so the four cities and and we're really, really excited to partner with Microsoft. Microsoft is a huge partner with us, they are helping us launch this over the next few years and are are providing capital providing resources in millions and millions of dollars worth of product for us and for the founders that we bring in. So there's a lot of more information that will be available online backstage capital. com slash accelerator, apparently. And it's a great site. I've seen it, believe me, and we're really excited about it. And this is kind of the next phase for us the next step for us totally
congratulations again you hugeness um, I guess I'd like to learn a bit a little bit more about how you ended up with Microsoft as a partner and what that relationship spent, like, sure.
Um, I actually was invited to speak at Microsoft recently, and I was invited by Satya their CEO, I, he, I guess he's on Twitter. So you saw my tweets, and he wanted me to be in the room, along with some other wonderful people. And after we spoke after the panel, he actually came on stage and said, that backstage itself had inspired him to, to launch a fund within Microsoft, a $4 million fund for women. And it was, you know, he said that in front of everyone, and, and I, you know, got it on record, so I could play it over and over again. And then I got the great chance to go around and speak with a lot of the executives there and told them a little bit about our plans, and what we wanted to do in our vision for the next few years. And it was really in line with what they want to do. And, you know, I think that
so far, we've been doing a really great job
and in our lane and what we want to do, and I know that Microsoft is they want to provide us with some of the the resources to help us take that even further.
That's great. So the moral of that story is always tweet. Not never.
Oh, yeah. Never. Not sweet. Yeah,
never. Not. Yeah, tweet. Is your heart out? Yeah, that seems like a good takeaway. Yeah,
there's a, there's a saying that Mandela said once when she spoken, our events that closed mouths don't get fed. So right. That's right. It putting it out there. And black and brown founders has also been actually both of us are have organizations that are being supported by Microsoft's initiatives for Microsoft for startups. It's been really awesome to see what Microsoft has been doing in the startup space in the last few years, and especially coming around to also support diverse entrepreneurs and diverse startups. So I think that that is something that many other companies should take lead and be doing this, I agree
and putting money where their mouth is, right, absolutely good. Both of us get invited to things and, and to to corporate events and things like that. And it's really what happens after we leave. That's really what's the most important thing and again, I was joking about the diversity inclusion kind of sending everyone out but you know, at this point it's become like you're going like the thing Oh, it's you're going to the dentist now Oh, they're talking about diversity Okay, I'm going to get lunch don't do that and then I just triggered anyone
and I just think that Microsoft and MailChimp who's also coming in as a partner think these companies are understanding that it's it's like we're now the the cool kids like it's it's the the right side of things to be talking about this and, and, and you can only talk so much before acting. It's
true. It sounds like alongside this announcement, you all have some more Team News, some other folks who are helping you build out their city specific initiatives?
Yes, we do. So I'm thinking through who I can talk about. So yeah, we were able to announce Well, first of all, Mark levy. Mark levy was at Airbnb for four years. And he was a global director of people basically, HR and HR. And we met about a year ago, and he was thinking about what he was going to do next. And he took a look at backstage and said he wanted to be part of it. So he's going to be really involved. We're very excited about that. Very proud of that directly from Airbnb will be involved. And then we have Wayne Sutton, are you here? Yeah, Wayne's here. Everybody should know Wayne if you don't know Wayne Sutton. I don't know where
the Wayne's coming through. And he and Melinda are going to be really draw the driving force for the, for the curriculum and for the programming and Christie Pitts. I can't say that Christie Pitts. Yeah, right. Christie Pitts. Creepy if you ever listen to gimlet startup, thank you. She will be actually I should make the make a real big point here. Christie Pitts will be running the accelerator. She's launching it. She's not up here. But she's running the accelerator. So please send all your complaints and comments to Christie. But now she's running things. And I'm very proud of that. We also have 10 jello. Amazing. Can you raise your hands the representatives. So Antonio and Rebecca 10 jello is a tech engine and engine in Palo Alto diverse team. And I've been doing it for a while and and really under the radar and doing an amazing job. And they're going to they're going to really help us and then Microsoft themselves are going to be working side by side with us. So they're not just giving us money. They're embedding people and
and aniyia Williams
around there. I was trying I was trying to stay in the best for last
I was easy. And it always always allows. So Neil Williams of black and brown founders, you may have heard of her. She is going to she has already started working with us on Philadelphia and beyond. And really, and you can speak to more of your role there. Yeah,
well, I want to start by saying that it's been like just as much as we've had a journey building tensile together. Now we get to work together on new initiatives through black and brown founders and backstage capital at the very first event that we did a little bit over a year ago was the first time by the way that arlan got on stage to to speak, it was a milestone store, everyone
involved and I was really bad stage fright. And Nia said, you have to speak. And so you can blame her for everything sense. Yeah,
exactly. All those stages you seen arlan on since then I pushed her on there the first time. But that was the very first black and brown founders project, arlan has spoken at all of our events, has supported at least half of them through sponsorship. And even in at South by this year, we did a huge collaboration, hustle house, and I say all of that, to express that, like, we've definitely been there holding each other down and, and working together to try to build this community on both sides of the table. And it's, it's our privilege, really, to be helping out with the backstage accelerator. We're super excited about it. We have been thinking through
sort of an ecosystem of how we can support founders and particularly we've been doing a lot of work, and Philadelphia, which is my hometown, but also the city of Philadelphia and Mayor Kenny have been very serious about creating a truly intersection will tech community there, it's a majority minority city, and at the same time, has one of the highest poverty rates of American cities, and has one of the largest populations of of poor black and Latinx people. And at the end of the day, I think when we start to talk about equity, and we talked about that in tech. And what does that really mean, for us, it's about closing that wealth gap. It's about us thinking through the fact that we do have changing demographics in the United States today. And if we want to continue to remain great, as some people put it, there needs to be more active participation from everyone. And so that is the stem behind some of the work that we're doing there. We've got lots of really great partners that we're working with. And the accelerator is going to be one additional thing that will be able to bring to give resources and build community and help people get out there, and specifically underrepresented or underestimated founders building companies that they otherwise wouldn't have even been given a chance to leave the starting line. We're
investing $100,000 into each company. In addition to all of the other value add, I should give a shout out to Josh Koppelman, in Philadelphia from first round. He was our very first investor in the accelerator, and did so very quietly and I'm shouting them out right now. And really appreciate that
guys gotta blow up modest people and try to be modest, but like, it's gonna be like, yeah, it's
for that. I mean, that, again, is putting your money where your mouth is, and like, really wanting change. And I'm just really excited. I, you know, if you, if you're thinking about applying, it's going to start in March, we're going to take applications for the rest of this month. And we'll let everybody know if they got in by the end of the year. That's the goal. And yeah, it's gonna be really tough competition, we're gonna have six companies per cohort and four different cities. Again, that fourth city will be crowd sourced. So even if you're not applying, if you have any preference of what our fourth city should be, including here, you should go to the website and check it out. Cool.
Yeah, I'd love to hear a little bit more about the city selection process. Obviously, we've heard a lot about Philadelphia. And that seems like it totally makes sense. And it's a wonderful fit for you all, did you work with your partners at all to develop what what markets you wanted to get into? Or was that just kind of intuitive? No, we actually backstage made the decision first, and then the partners came in, after
we started with Los Angeles, because I'm based there and there, there's a ton of exciting things happening there, just in general, and just the, the ecosystem there, it's just really primed for it, we feel like we'll have a lot of support there already do. And we're excited with the announcement. Because we know that a lot of our friends will reach out now and, and be part of that. And there's just the most diverse group of founders and types of companies that they're building. And we have a lot of current portfolio companies there. So Los Angeles is exciting, it has a lot of a lot of, there's a lot there to pull from. So for us, it was kind of that's where, oh,
creative, creepy of all people a subroutine.
So we are, we're really excited about about that, and where we're based there, and an Oakland so this made a lot of sense test London, I'm super excited about London. And some people will wonder about that, I can tell you a lot more. But briefly here, London, I visited a few times I was brought out there a few times, and the founders, they're just blown away by them. And especially there, there's this, there's really interesting challenges there. There's a lot of money, there are a lot of investors. But it really reminds me of when I was like three years ago here, when it comes to the opportunities that are afforded there. In addition to that, it's a complete melting pot of a city. And we can pull from different parts of England of Europe as a great launching pad. And really exciting to me is that there are several groups of African founders who found their way
in the ecosystem in London, who are, again, doing great things with very few resources, but are being overlooked. And so we felt that there are many, it was a it was fertile ground to start over as our first place outside of the US
absolutely this I'm like, really exciting cities to get involved with. And it's always wonderful to hear about startups coming out of places that aren't. And Philadelphia's
is as an Ian said
it Philadelphia is the first of a lot of things right in our history. And it really was kind of the, the, where the first real idea came from lutein brought the idea to me for the accelerator in Philadelphia was one of the very first places we said, we would go, and Philadelphia has
the makings of a really special place. I think that as far as it goes with tech, I think, both in terms of where it's located, both when you look at the cost of living there, especially when you compare that to the Bay Area. And I think that the other thing is that when Philadelphia is thinking about what does it mean to become a tech city, it's not about how do we, you know, retrofit this like Silicon Valley model and become like, I don't know, like silicon, Liberty Street, or whatever they want to call it, but more so like, how do we use technology to do what Philadelphia does best? How do we enable that to be the sort of economic key to how we continue to grow and thrive. And I think that that's how each American city that is thinking about integrating technology into into industry and what they're doing is doing it in a way that's authentic to them. Definitely,
um, I'd be curious to know if this is part of what you've talked about, about building new equity structures is this like, kind of moving toward this ideal?
I guess we spoke about it on the phone a bit, but both that and if this kind of accelerator program is something that's been a long term goal for backstage capital, it makes so much sense. Like when I learned about I was like, Oh, of course, it's such a natural fit. Well,
it actually took a while for me to be convinced to do it. Because we only we only like to do things that we really feel like we can dominate, you know, that we can do a really great job.
And people, you know, had suggested it for a long time, I just didn't think we were ready for anything. I think there needs to be another accelerator, why would there need to be one, there's a lot of things that were factors. And then this year when we reached him 100 companies, and we've looked at, well, you know, we put a $25,000, $200,000
into these companies, and really have scaled the platform around that, because he's small checks. But the, the value in most cases, we are the first call our founders make, even if they have millions raised, they call us first for for good and bad. And I felt that was really strong value. And in addition to that, after we launched backstage studio, we had a lot of freedom to build initiatives within and we brought on more people and I really got a strong message from our team, which who I really trust and value their opinions that that was the way we should go, because we can have the most impact with the without needing to, to necessarily raise hundreds of millions of dollars, which we plan on doing at some point. But it's not happening fast enough. So we we tend to do things where we don't like to wait for other people to catch up to us. We see what can we be good at? What can we be great at and and go in that direction. And and I thought it makes a lot of sense to us today. And it's after very deep and strategic thought to get to this point. Yeah,
absolutely. That makes sense. Um, I guess after this, I mean, it's such a big, big undertaking. And it sounds like it's going to be amazing. Like, what's your moonshot for backstage, I guess like what would be like the big you know, in goal not that there's an end goal, you should keep going. But well,
so there's a few things. So we we announced earlier this year that we have launched a $36 million fund that invests $1 million at a time into black women founders. And that we're working on that we will see the first two announcements of those founders, by the end of the year will continue investing in five to six of those founders each year after, I personally believe that you'll see us with 100 million dollar plus fund by the end of 2020. And we'll keep we'll keep going. And we'll keep listening to the founders because those are our customers. And we'll keep doing what feels right to us and trying to leave things a little better than where we found them and do no harm. That's like, it's always our goal, I think we've reached so many milestones already. And we have to, like, I'm the first person who has to really think about that, just like 100 companies invested in in three years, starting from nothing, we take that really seriously, I do think with the accelerator, it will allow us to now continue with our growing deal flow to really service 25, 5100
companies a year as we go. So maybe by 2021, there's a chance we could be in 1012 cities and investing in 100 companies a year. And so that's how we look there. And then I think, as always, you'll you'll continue to see some some news rollout from us.
I want to add to that too. And just say that one of the other things that I is going to make this accelerator program really special is the fact that it's conceived from the idea that these are people who are vastly underestimated. Typically, we end up being on the fringes of the room, when we walk into any given event, like in a place like the valley and that we're helping to cultivate these companies, not only through what I think most people are used to seeing through an accelerator program, but considering those things from the lens of are we is is this a model that actually suits founders like this, like, I know that we had a very early conversation that I know really resonated with Christy around, you know, kind of the zebras versus unicorns, and Megan and I have talked about this before on the TechCrunch podcast. But I mean, I think on one hand, there's a philosophy that you could say that, you know, these people deserve a check, they've got the right things to be a venture back business. But we also know that the model of VC is that a few when, and many of them loose, right? Like, that's, that's the way it works. And is that beneficial for communities of color for women founders, for LGBT founders, where it actually seems that it's much more impactful for us to make sure that as many of these people can build successful businesses as possible, right, like, that's how we really start to make a sea change. And so I love that in the work we've been doing with backstage, that they're also balancing this idea of not only how do we invest and know that those are going to yield returns for us in the LPS but also, how are we really supporting these founders to make sure that they're going to be in it, and they're going to be able to do more than just, you know, be a flame in the dark, right. One of
those things that we're doing, we talked about this, you know, is that the idea of demo day to to us seems a little bit like standardized testing, where you kind of memorize things for the test now you're either good at or you're not really Yeah, do you really retain the information is it really that
important and it's in its you know, it it's important to a lot of accelerators. But I think we're thinking about things like what can be an alternative to a demo day with backstage since we get to kind of create what we want. So things like that things like child care, things like just thinking through things in a different a different lens, while at the same time having very high standards for ourselves as we always do, and and putting some real money to work well, it sounds really exciting. Congratulations again. That's all
the time we have but happy to hear about it.