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Transcript of the Episode
Brenda Darden Wilkerson: Welcome to B The Way Forward. I’m your host, Brenda Darden Wilkerson, and I am so excited to bring you today’s episode. This week, I spoke with Arlan Hamilton, the inspiring investor, entrepreneur, and founder of Backstage Capital. The venture capital fund that she built from the ground up.
Arlan Hamilton: Mark Cuban comes along; he pours millions of dollars into backstage.
I ask him, why do you want to invest in, why did you invest in backstage when you don’t like to invest in other people’s funds? He said, you’re in rooms I’ll never be in.
Brenda Darden Wilkerson: Arlan is also the author of the book, It’s About Damn Time. How to Turn Being Underestimated into Your Greatest Advantage. I’ve actually read it twice.
And she has a new book coming out soon called Your First Million: Why You Don’t Have to Be Born into a Legacy of Wealth to Leave One Behind. Arlan’s words are so inspiring. So let’s get to our full conversation.
I have the privilege of sitting here, about to talk to Arlan Hamilton. Arlan Hamilton, the author, the entrepreneur, the serial entrepreneur, the VC, the superstar, and she’s going to share some of her gems with us today. Welcome, Arlan.
Arlan Hamilton: Hi, Brenda. It’s so good to see you.
Brenda Darden Wilkerson: It’s always good to see you. So excited for this conversation today.
So, just, I’d like to start out with, you know, Arlan, you have a powerful story. About how you got to where you are today. Can you share a little bit of your story with the audience, just to give them a little bit of your background? I mean, everybody listening should know Arlan. You should have already read the book, you should have already known this story, but for those of you who might not, Arlan, give us just a little taste.
Arlan Hamilton: So, um, for about a decade, I’ve been working on A little project called Backstage Capital, uh, it’s turned into a big project now. And about a decade ago, I wasn’t really sure what startups were. I definitely didn’t really know what venture capital was, the investment capital for startups, but I was curious, and I was seeing people like.
Ashton Kutcher, Ellen DeGeneres, um, Troy Carter, who is a black man who used to be Lady Gaga’s manager. He got her started, right? These different people who were in entertainment were making investments in a place called Silicon Valley. and in startups. And I wanted to know what that meant. Um, and it felt very foreign to me, but then I did more research and I learned, oh, okay, so these different tools that I use every day, like these apps like Twitter, or when I use email that came from Google, uh, when I use Gmail that comes from Google, when Google was used to be a startup, Apple was a startup, all these things I start to understand, oh, that’s what startups are.
So I was curious about why these different Entertainers and managers behind the scenes were spending their hard earned money in their time away from just having this cool life that I thought they had, right, as entertainers. And I started doing research and I had always thought of myself as an entrepreneur myself.
I started a candy company in the third grade. And I would sell different candies to my fellow students and I had a whole thing going, right? So when I learned what startups were, I realized, Oh, I’m an entrepreneur. I have always been an entrepreneur. I just didn’t know what to call it. I just didn’t understand that there were so many of us, and this is why I always felt like an outsider to my friends.
Everyone else had, you know, these stable jobs, and they had health insurance, and they had a path to where they were supposed to go. They went to college. They had all these things. And I started reading about people who were these outliers, and it really resonated with me. Mostly they were white men, but I really, it didn’t really register actually at the beginning.
And then it didn’t register that they were white men. It was just these people that, oh, I’m like them. Right? So then the more I read and studied, the more I realized that, um, that I really wanted to start my own company. And so when I realized that, I said, well, I need to know. If I’m going to raise money for this, I need to know what the investor is thinking and how to talk to them.
So I started doing research on that end, and that is when I learned the statistic that would change my life. What was that? Less than 10 percent of venture funding goes to anyone who’s not a straight white man in the U. S., where they make up approximately 30% or less of the country. And that hit me like a ton of bricks. Black, gay woman, um, who was poor, over, overweight, all the things, right?
All these different things intersectionally. And I was upset, of course, but then I thought, wow. What an opportunity, what if there was someone who every black founder in the country called when they were starting a company? Because I had started to learn, deal flow is keen, right? It’s important to have different, to have founders wanting to take your money.
I didn’t have any money, but I was learning these, these things about being a good investor because I was trying to see what was on the other side of the table. I, I, I figured out, I said, well, if deal flow is king and I know all these founders and I know how to talk to these founders who are being overlooked, I could be the person that people come to when they don’t feel like they’re getting a fair shake somewhere else.
So I set out on this path. It took me several years to get my first investor to be able to make investments. But then I went on to day after day after day, walk up that mountain. And I ended up raising, um, several million dollars and investing in over 200 companies led by underrepresented, underestimated founders.
Brenda Darden Wilkerson: And that is amazing, right? That is a story that really has changed. It’s really changed the game, right? Because as you said, you were looking at this group of people. You didn’t, you, you didn’t see yourself in that mirror, but now you’ve done, you’ve got this amazing success. And now there are others of us who can look at you and see ourselves in that mirror.
I want to say that you also realized that you were a visionary. Did you realize that?
Arlan Hamilton: I definitely didn’t realize I was a visionary. I wasn’t sitting around saying, Whoa, I’m a visionary.
Brenda Darden Wilkerson: But I mean, you, but you are right. I mean, you took what you saw and you said, what if, and then you built toward that thing and.
I mean, you’re still a young person. I mean, it didn’t take you 50 years to get that done. So, you know, that’s remarkable. I just wanted to call that out. Right. And for many people who feel out of place, you know, you need to check those boxes. Are you that entrepreneur? Are you that visionary? Because we need both of those things.
And we see the amazing example that you’ve set, Arlen. But my next question is, You looked in that mirror and you didn’t see yourself. You were that outsider. So tell me about how that worked for you. And maybe how it worked against you.
Arlan Hamilton: Well, it worked for me because I was okay hearing the many, many no’s that I would go on to hear.
Because I knew that I was right. I knew that this type of fund needed to exist with or without me. Therefore, anything that I could have taken personally, Which I did, of course, sometimes, but anything that would have derailed me, I was able to just keep walking through, because I said, well, this thing needs to exist.
This whole system needs to exist for us. It’s not just about me. So it worked in my favor there. It also helped me to your point about the vision. It helped me. Every single day, I get better and better at articulating what I wanted to see in the world and galvanizing people around that because I could see it.
So clearly, I knew exactly what I wanted those rooms to look like. Several years later, working against me, I don’t know that it worked against me, but I will just say that it was not easy to do this and. In many ways, still not. And it’s these rooms, the old boys club and all of that. It was just front and center.
Like the movie scenes that you see with like 12 older white men smoking cigars and making decisions about thousands or millions of people that I would just walk into those rooms and have to part the sea, you know, have to kind of just say. You have to take me seriously because I represent so much more that’s out there.
And so just that one by one, I definitely ruffled feathers on the way. So having that understanding that I deserve to be here just as much as anybody else, because especially because I represent so many other people that definitely was not taken very lightly by a lot of people who were in power because I was threatening that power in their opinion.(09:33)
You know, those very thin, that very thin skin that people have when they have power that’s just handed to them. That was being, that foundation was being threatened in their opinion and therefore I needed to be silenced. I needed to be, um, derailed in my pursuits.
Brenda Darden Wilkerson: I love that you keep saying, in their opinion, because that’s so critical.
They, you actually were handing them an opportunity.
Arlan Hamilton: Right, that part.
Brenda Darden Wilkerson: Right. But because they couldn’t see it and because they had been, everything had been handed to them, they took the opposite, um, response.
Arlan Hamilton: And that still happens, you know, it’s been a really interesting look back at the last few years at the different arguments and, And non arguments I’ve gotten into with millionaires and billionaires, all of the men, all of them doing very well for themselves, but taking the time to try to trip me up because I, I said something, you know, if you’re, if you’re secure and what you’re doing, you believe in what you’re doing, my chirping should not.
You know, mess up your day, but it was, it was a telling, telling thing when those things would happen.
Brenda Darden Wilkerson: So, okay. I’m going to venture out there and say that some of these characteristics that you’re describing of these people are some of the same types of characteristics that are generally ascribed to the folks in the meritocracy.
And now you have a totally different background from them. Um, you know, you’ve shared in your book and we’re going to talk about your book. You shared in your book, you didn’t have an MBA. You weren’t trained in these things, right? Many of them are. They went to, you know, to B school. They went to Harvard or wherever, right?
You didn’t. Um, you started out in the music business, which I’m going to want to talk some more about. So, given the difference in your background and their background and how you built your success, give our audience the definition of what meritocracy should be. Define qualified to do this work.
Arlan Hamilton: I don’t know if I can define it, but I would say it would be great if that we could treat it like, uh, like the reality competition shows or something like that, or if we could create one, because it really is put you, you ever seen that picture?
Uh, the black and white hand drawing of a black woman and a white man, they have the exact same path in front of them. They’re getting ready to go. And the white man is saying, what’s the problem? We have the same path that we’re going on, but the black woman’s path is riddled with obstacle one after the other.
That’s it. Right. And I think some of the most interesting conversations I’ve had about this besides this one with you have been with white men. Who are sort of like, once you, once you open their eyes to that. They’re like, oh, right. I also like to compare it to, I do this very quickly. Like, if I’m speaking on a stage or something, and there’s a group and the audience is mostly privileged white people, affluent white people, I very quickly say, look, when I got on the plane to come here, I had a level of privilege.
Privilege is not the bad word, entitlement is. I had a level of privilege because if you’ve ever watched someone in a wheelchair try to get on a plane or get on a plane, it is very difficult and we have a privilege I do every day that I get to walk across rooms and get myself on planes. Does that mean that I, um, I’m a terrible person?
Does that mean I don’t deserve to be here? Does that mean that the person in the wheelchair is going to get more food than I get or get, you know, get something taken from me? No, it simply means that there’s a difference and that if I can be helpful at all, I should be helpful. I should move people out the way.
I should help lift. There’s some people who will never get it and I’m not trying to change their minds. I don’t have time for that. None of us have time for that, but there are a lot of people who, if you explain it to them once, I only explained it one time,
but if you explain it to them, their eyes are open and they simply hadn’t thought of it that way. And then they get to work in their allyship, and that’s really interesting. And what that main thing is like, yeah, I wish there were a meritocracy in most cases, but they’re just not.
Brenda Darden Wilkerson: But I guess, I guess what I’m driving at is, as we really start to think about who should be.
Creating, because that’s what you’re doing. You’re creating opportunity. You’re helping those who also have vision, who are solving problems, for folks that haven’t had their problems solved. Who really should merit that? Be in that space. Who really do we need? Let me put it that way. Who do we need at that table?
And we can talk more about that later. Um, because I’m hoping that people in the audience can see in your experience themselves and see that maybe if this is something that they want to do, that they can do it regardless of whether or not they can look in that mirror and see themselves.
Arlan Hamilton: Yeah, I just think that representation is the key.
I think that there’s absolutely no reason that any room that’s a tech space should have representation. 19 and a half white dudes of all ages and someone who kind of represents some other group. And that’s all that’s considered diversity. Well, we hired, we, we, we invited my black friend. So I think the answer is like, it’s, it’s a representation, just like I’m having this conversation.
I, in the back of my mind have to think, well, what do I do on a daily basis to help, um, Asian Americans. with representation, Latinx, Indigenous, you know, the list could go on and on and on. And it’s not that you’re going to all, you’re not going to be able to solve everything, but it’s, it’s the awareness that you don’t, that you don’t represent everybody.
Yeah. Yeah. And to your point, anybody who’s. Thinking that they there’s something they want to say or accomplish or somewhere they want to be But they don’t feel like they’re the ones who else if you don’t see yourself in the space If you don’t see yourself represented, which is the case for me. I did not see myself represented Therefore I wanted to go create that spot right then There’s no one who’s going to invite you, Brenda and I will invite you now.
You’re cordially invited to take your position on your throne because it’s yours to take.
Brenda Darden Wilkerson: Absolutely. Let’s talk some more about your book.
Arlan Hamilton: Yes.
Brenda Darden Wilkerson: So first of all, what gave you the spark to start writing It’s About Damn Time? which is my favorite. I love it.
Arlan Hamilton: Thank you. Thank you.
I also want to point out that I came up with the title before Lizzo’s song came out.
Brenda Darden Wilkerson: That’s important to know.
Arlan Hamilton: Thank you Lizzo, by the way, for giving, for giving us this song, gifting the song to the world, because now it, it reminds people of my book, which is so cool. Like that’s awesome. Um, I feel like I have a theme song for the book, which is really amazing. So I, when I was learning about venture and startups, and I was kind of doing this for a year, teaching myself homeschool curriculum, essentially, I read every book I could get my hands on when it came to venture capital, or even just the startup world.
So people like Brad failed, who wrote 6 or 7 books that have helped me and so many other people, and they were fantastic. but not one of them was by a black woman. So when I started to get some success and reach some milestones, one of them being on the cover of Fast Company in 2018 and that, that issue of that print issue selling more copies than the CEO managing partner of SoftBank multibillion-dollar fund.
I realized it’s because people are seeing themselves in that cover and it’s different. And so that really, that was September, October of 2018. That’s when I decided I wanted to write a book and no one asked me to, no one told me to, you know, I just said, I want a book. I want the book that I was looking for several years ago.
I want someone to be able to pick up a book, learn about startups, learn about venture capital, learn about their options. So it’s a business book, but I also want them to feel like they’re hearing from someone that they can relate to in this way. So it turned out. I couldn’t have asked for a better turnout of what it has meant for people.
Brenda Darden Wilkerson: Absolutely. Cause I remember when I picked up my copy, I couldn’t put it down almost until I was done. And I also, I love the fact that you, you were the one that read, uh, the book. So if you want to listen to it, it’s amazing. I always love to listen when the people who actually write the book read it because you actually hear.
The truth through those words and I did, and I can actually remember where I was, I went walking one day and I was listening and I can actually remember where I was when I heard certain things. And that just shows you just how, you know, just how impactful those words were. So, uh, some of the things that you talked about is that information is your weapon against insecurity.
Talk some more about that.
Arlan Hamilton: Um, well, let’s, let’s talk about the philosopher, Beyonce. Okay, Beyonce has a song that says, come on, she says, girls, ladies, let’s get in formation, right? So everybody’s getting in formation, um, but I think she’s also telling us to get information. That’s how I hear it. I hear both ways.
And. What I mean by that is, for a great example, is that for 36 years, not all of those, because I was a baby for some of it, but for most of my life, I had debilitating stage fright, and as you know, I can speak on a stage now, something happened, right? Um. I was able to combat debilitating stage fright to the point where I would just leave the building if I had been scheduled for something and realized I was there, like, how did I get here?
Most of it was by understanding, having this moment of understanding, what am I most afraid of? What makes my heart pound? You know, most, half of the world has stage fright, so it’s something that people can relate to. What makes my heart pound? Why am I worried? Usually, it’s you’re worried that you’re gonna say something quote unquote stupid.
Brenda Darden Wilkerson: Mm hmm.
Arlan Hamilton: That you’re not gonna know the answer or you’re gonna get it wrong and then you’re gonna be stuck. That’s how it was for me. Once I asked myself the question, because I never had that conversation with myself, once I realized that is what I’m most worried about, Then I understood. Oh, well, then let me make sure I understand everything I can about the topic.
And when I go and speak now, I feel very confident because I have done not only the research, but of course, have acted on and I have executed so much. I’ve talked to thousands of founders. And so that information, if I don’t know what something means, I ask, I don’t, I don’t, I don’t get worried if, you know, If I don’t know what a word means, I asked somebody to stop and explain what that word means, you know?
Um, and so that information to me is power. It’s power, power, power. You also learn in that, that it’s okay not to know the answer. So, you also learn to say, I actually don’t know the answer to that. You know, right in front of a bunch of people, you still, you’re still kicking, you’re still there. I also used to be afraid that I would just faint and fall off the stage.
I like roll down the stairs, um, of a stage.
Brenda Darden Wilkerson: The things we imagined, right?
Arlan Hamilton: Yeah, I thought, okay, I’m going to faint and roll and everyone’s going to be silent. But it really has made all the difference in the world. And I speak on stages across the world. Dozens of times a year, and it’s just the most, one of the most life changing things that I could have done for myself.
And so another, another example is that when I was, um, I don’t know if we talked about this yet, but was, um, poor and I was homeless for much of that beginning part of starting backstage. And there were many, many days that I went hungry, right? But what, what I knew at the time was. There were a lot of things outside of my control every day, and days went by very slowly back then, but one thing that people could not take from me, you couldn’t take from me, no matter what happened, no matter what my bank account said.
Was information and knowledge that I had. So if I learned every day, which I told myself, you are going to no matter what happens today, you will learn something. If I learned every day, then I would be building like a treasure trove, a vault of information that was valuable. And then when I was in these rooms that I got myself in, or when I was in these situations where I could kind of use some of that information, that valuable information went on to be of value to someone else who had money or something else in exchange.
And what I mean by that is you give. The first investor that I ever invested in backstage was Susan Kimberlin and it was because she was trying to learn about angel investing. I had all this knowledge because I had been studying for years. She had money. I helped her Angel Invest, and therefore she’s like, you’re valuable to me.
Mark Cuban comes along, he pours millions of dollars into Backstage. I ask him, why do you want to invest in, why did you invest in Backstage when you don’t like to invest in other people’s funds? He said, you’re in rooms I’ll never be in, right? So all this information… You can be so powerful, it does not matter at all what school you went to, it does not matter at all if you went to college, what your bank account looks like, if you have an expertise in something, which is something you can control, you can go so far.
Brenda Darden Wilkerson: That is so powerful because there are so many people listening in that might have had a part of their lives where they didn’t believe that. They felt like, and I think that your conversation around knowing what you can control and what you can’t control and then taking control of what you can’t control and doing something every single day or on a regular basis.
I think those are two very important, very important points that I hope everybody gets.
Arlan Hamilton: Yes.
Brenda Darden Wilkerson: Okay. Here’s something else you said and I love this. No one is self-made. There might be somebody. We could probably name a few names of people who don’t look like you, who might have done maybe one tenth of what you’ve done, and they would say…
I pulled myself up by my boot, my bootstraps, or I got here all by myself. Let’s talk about that and, and the impact that that has on the industry.
Arlan Hamilton: Well, they’re a lie.
Brenda Darden Wilkerson: See, first.
Arlan Hamilton: First of all, yeah, that, you know, that helps with imposter syndrome, by the way, if you really think about it, because a lot of imposter syndrome is based on, well, all these other people were able to do so much and look at me, I’m 33, and I haven’t been able to do that, or I’m 57, I haven’t been able to do, but this other person is 57 did, let’s talk, let’s think about the people who are your favorites, anybody in any industry, if Who are your favorites or who are well known from Bill Gates and Steve Jobs to Beyoncé herself, right?
Absolutely, yes, there’s something special about them. Absolutely, absolutely, yes, there is a drive in them. that very few of us understand, you know, can understand, right? I happen to understand it and we’ll see what the next 50 years bring, right? But especially with the men who we’re talking about here, who’s at home with the children?
Brenda Darden Wilkerson: Exactly.
Arlan Hamilton: Who is at work with them preparing their presentations, script writing, telling them what their schedule is. Who’s doing that for us? That’s why I say none of us are self-made. I absolutely will take credit for being a lot of things and for doing a lot of things and some of it on my own because it was very lonely for a lot of that early period, but no one should say, you know, this is what I hear the most from, you know, when people are like joking with me, they’re like, you, I feel like I should be doing more.
You do so much. You do so much. And I hear them, but don’t you know, with everything that I do, I have people working with me to do those things. Right. Thank you. You know, and if there’s some things that I do truly on my own, like, you know, I can’t even think of it, but if there’s something I truly do, it’s because it’s just like, I’m geeking out on it and spending extra hours on it, but it’s, I’m only able to do that because these other nine things are being handled by people.
So, you talked about visionary. I do think that, you know, there are a lot of people have said this and I do, uh, uh, subscribe to this, which is there’s the visionary and there’s the builder. And sometimes you have both in one person, very, very few. But the reason that the visionary can go out on stages with their tight black shirts and their little McDonald’s microphone and just blow your mind is because of the builders behind that and the reason that the builders gravitate towards the visionaries is because the builders … want some something to believe in.
To recognize their talent and to use that talent to make the world better.
Brenda Darden Wilkerson: I love it.
Arlan Hamilton: So You can’t, you can’t, there’s no one, if someone tells you that they got here by themselves, on their own, you can’t trust that. You gotta, you gotta break it down for them. Okay? Okay. Who were the people, who weren’t even in your family, who make it possible?
Who was cleaning your hotel room while you were going to these conferences? You know what I’m saying? Like, to me, it’s just something that I think about all the time.
Brenda Darden Wilkerson: Absolutely. Absolutely. And I feel like, um, you know, we need to have this conversation out loud more often, because I think it’s another one of those things that it’s a hype that people believe.
And so then they just replicate it, right? Because they don’t think about it. Yeah.
Arlan Hamilton: And they believe.
They kind of get high on their own supply, right?
Brenda Darden Wilkerson: And it’s good for them to get this wisdom. Okay, one more thing from the book before we move into more about BC. You said something that I think is really critical and it touched me in a deep way.
You said, forgiveness is a productivity hack.
Arlan Hamilton: Mm hmm.
Brenda Darden Wilkerson: Talk about that.
Arlan Hamilton: Well… Um, so I work with a lot of entrepreneurs and we’re always trying to figure out ways that we can be bigger, stronger, faster, better. And at the same time, I work with a lot of entrepreneurs who often tell me how this person did them wrong, how this other person did them wrong.
And. We’re talking to seven years ago, 14 years ago, four months ago. And that’s okay. Like I, I come from a long line of petty, believe me, I can tell you stories, but what that is doing is affecting you and your ability to succeed in your productivity. It is not hurting none of the person whatsoever to have you see them.
So I say for your own benefit, not for anybody else’s. And that you don’t have to forget, like they say, forgive and don’t forget, you forgive and let it go, like let some of that off of your own chest, that helps you go further. So sometimes I find myself. Thinking about how somebody did me wrong, right?
Happens and I can sit with it and I can think about it for a little bit But if I’m if it’s day after day and I still haven’t let it go. I have to check myself Say why are you letting them get you twice?
Brenda Darden Wilkerson: I love that.
Arlan Hamilton: You know, that’s not cool. Like we got stuff to do. And it, we have stuff to do. We have a lot of time to make up for it.
Brenda Darden Wilkerson: And it’s taking up that cognitive space that the work could be or creating new ideas and other things. It’s, it’s distracting. Right.
Arlan Hamilton: It’s distracting. And I say don’t forget because you don’t want that same person to be able to do that to you over and over again. So you don’t just like say, oh, it’s some sort of like self-help.
Oh, it’s everything’s beautiful. You, you’re, you did nothing wrong. So remember, but don’t have it lingering, holding you back, holding you down for days upon days, years upon years.
Brenda Darden Wilkerson: And I hope that, I hope that helps somebody who’s listening because it’s so critical. because especially when you’re going to go out there and try to do something different, you’re going to go out there and try to be, um, be yourself and start something new.
You are going to run into somebody or some situation. It’s not going to turn out well, and you’re going to need to be able to get past it. So I think that’s such amazing advice.
Okay, let’s talk about the numbers when you talk about VC world. I want to do, I want to, I want you to talk to two pieces of it.
I want you to tell us more about, you know, the numbers around who’s a VC and, and the types of things that they seem to be stuck on funding. Um, but then I also want to talk, I want you to give us some advice about how everybody listening who, who may never be a VC, but we might have some money and we want to become that angel investor.
Like you already shared that you help someone, um, become an angel investor, become a better. Angel Investor. I want to hear how, okay, we, we’re, we can’t wait for this Calvary all the time. We can talk about some of the things that perhaps we can, we hope that they change so that they fund more things. Um, and we also can talk about more people like you, you know, and you, you are, you know, you are the unicorn.
Um, and we’ll hopefully more people will follow in your footsteps and do some of the things that you’re doing, but also how can the rest of us, participate on our level, um, in making a difference with companies.
Arlan Hamilton: Well, venture capitalists are simply people who are investing, uh, other people’s money. So high net worth individuals, money, family offices, um, corporations, endowments, pension funds, things of that nature in a pooled investment vehicle, usually.
In the millions to table stakes and can range from anything from a 1,000,000 dollar fund to 000 dollar fund. And the whole firm, the whole company could have 5 or 10 funds under under 1 umbrella. So, backstage has several small funds, you know, and it, it adds up. And you’re making investments in a fund that has a thesis.
You usually invest in anywhere from 10 to 30 companies per fund that can change in either direction and you have a time horizon, which is usually 7 to 10 years, maybe 3 or 4 years of actively investing out of that fund, the individual fund, and then a few more years of nurturing those investments. And when you start to get money back, because that company in your portfolio is doing well, it sold or went public, they take that money.
Put it back, give it back to the original investors who poured into you and then you all start to share some of that profit as it stacks up. That’s the goal. That’s the ideal situation. And so it’s, it’s a whole thing, right? It’s, um, it’s, there are thousands of funds, but it’s, it’s pretty small compared to other private equity.
It’s like a small sliver, even if though it’s in the, in the hundreds of billion, you know, it’s in the billions that gets, uh, get deployed. Now to be. Like, some people are going to go on and start a fund, and I can tell you it’s really difficult to do, but don’t let me or anyone else stop you. But what I love to explain to people, and what a lot of people don’t realize is that they don’t have to do all that.
You know, I was doing that because I had a very specific reason. Ten years ago, people were not talking about diversity in venture capital, where funding in that kind of space is necessary for some companies to grow and to thrive. Not for all. And I felt we need to be represented there. That’s why I did that.
But it’s not because I just think venture capital is the end all. What I love actually is I love angel investing and I love crowd equity investing. So at this point, I have to tell you, I am not You need to talk to your own legal advice and your own accounting advisor. I’m not giving you like, here are the stock picks or here are the companies to invest in.
I’m just simply saying that in general, anybody, almost anyone with a laptop or a smartphone can be an angel investor because of the JOBS Act, because of the the Act That Obama signed years ago, and that so many people had to do with creating that now you see, I don’t know, dozens of websites that are crowd equity websites.
So, you know, Kickstarter and, you know, that type of thing. Um, even GoFundMe and those are cool. And so you, you put money in, you put 50 in, you get a t shirt or, you know, you, you help the person bring their project to life. And that’s one way. So that’s crowdfunding. Crowd equity funding is the same kind of thing, but you own a small piece of the company.
Or a small piece of the company in the future. Right? And so you go to Republic, you go to WeFunder, you go to Seed Investors, all these different funds. I fund, uh, women, fund black women. There are all these different ones actually fund black women is not equity based, but it’s really interesting to check out.
And so what I teach people is. Let’s say you have an extra 1, 000 this year or an extra 10, 000 this year, if you have an extra total of an extra 10, 000, take 2, 000 of that or whatever. Again, I’m just giving you general generalities. I’m not telling you exactly what to do, but I would say take a small percentage that you’re willing to lose outright because a venture is a very high risk situation but take a little bit of that that you consider.
Thank you. This is enough. This is what I’m going to say is for entertainment and education. And then you say, look, let me go over to these different, um, platforms and look through lots of companies and see what I like. And I will put 50 here. I’ll put a hundred there. I’ll put 200 there and create a portfolio.
And what you’ll do is you can call the founders up and say, how are we doing? You know, cause they’re raising millions out there. But you have now an entrance into behind the scenes of what information they’re willing to give you, and you have a stake in something. And over the years, you can watch and you can see how it’s doing.
And then, so what’s really important is to hedge your bets. So you never just invest in 1 company again, in my opinion, generally, you never just invest in just in 1 company, because that company needs to have the wings and the room to fail. Right? Especially if you’re talking about underrepresented founders, we need to be given multiple options and chances because everybody else has been and it’s not just fairness.
It’s also like. The reason Elon Musk can send, uh, rockets into the air is because he’s failed 15 times prior to that, right? So you need that time for your chops. So then you look back and 3 years later, you’ve invested in 20 companies, you spent 4,000, you have a portfolio and maybe over the years that turns into 10,000.
And you, again, it’s lottery ticket money or casino money or book money. It’s not change your life overnight, get rich quick, get rich quick scheme. Right, but it’s very empowering, empowering, and you can help empower others by doing when so many of us get together, right, and we’re gonna, a thousand of us are gonna put 200 each. So this company has, yes.
Brenda Darden Wilkerson: Yes, I love that. Um, and, and you have done so many amazing things to help people get educated around just this. I mean, you continue to, [00:40:00] to solve this problem of places where you just haven’t seen us or seen yourself. Thank you and give people an entrance into another part of the VC ecosystem. So hats off to you, really, for that, because that’s amazing.
That is amazing. So, you know, and because you’ve had your hands in so many things, the next question I want to ask you is, I’d love to hear a couple stories about when you were trying some things and, and maybe it was hard because I, I love where you talk about in your book, you talk about, you know, you only need one out of a hundred. to say yes. That means that you’ve got to be willing to go after those hundred. You got to ask it a hundred times, right? And, and in asking it a hundred times, maybe you ask it a hundred different ways. You, you’re actually getting, you’re polishing this thing, um, such that by the time you get that yes, it’s something better than that, that first, that first time you asked.
But, you know, while there’s a struggle, Cause obviously there’s a struggle as you’re doing something new. Talk to me about some pivotal decisions that you had to make, especially the ones that you almost talked yourself out of.
Arlan Hamilton: Yeah. A couple come to mind there earlier on in the, in the process. One of them is, is I think I do speak about this particular one in the book.
Um, And it was, uh, probably 2016. So I would have had like a few, maybe six investors and maybe six investments. You know, at the time I have 200 plus now. So it was early, early on. And there was a woman, a black woman in New York. I live in LA. She was in New York and she asked to meet with me. And I, she was, she’s kind of well known and I was so excited because I thought she’s going to invest.
That’s so cool. So I go in and meet with her. You know this story?
Brenda Darden Wilkerson: No, I remember. I do remember it. That’s why I’m giggling. I can’t wait.
Arlan Hamilton: I go, I go to meet with her and I think we’re having a story, you know, a conversation where she’s gonna talk about what I’ve just overcome, where I’m going, etc. She sits me down and she goes on to tell me that she saw a picture of me in some press piece, small picture, where I was wearing blue.
And if you’re confused, this is how I felt too. And she said, you’re wearing blue. You can’t wear blue. It’s not your color. And we’re going to need to get you into some better clothes if you, if you’re going to be taken seriously in this industry. And I was just really taken aback. I didn’t know if I was in Devil Wears Prada.
I didn’t know exactly if I had walked into a dream. Because it was just so it sounded like something a man would tell me and it’s like you’re not smiling enough Essentially, and I thought oh, that’s interesting So the reason I answer with this is because when I left that meeting I was in New York I was walking, you know, it’s a grid.
So I was walking the grid And I actually thought to myself for a few blocks, should I go and walk over to some store and get fitted and spend, you know, the little money that I have on a new wardrobe so that that would make it possible for me to raise money. And by the, and I’m, you know, in jeans and a hoodie, that’s my.
That’s my uniform essentially is jeans and a hoodie for the most part and by the time I got to like block five or six I just laughed I’m like nah, I didn’t have time for that and I said no, I know cuz I almost talked myself into carrying But I said, you know what? I said it would be different if I hadn’t accomplished so much just now.
It would be different if I didn’t have something so important to talk about. And that was in the context of her trying to help, because I really do think she was trying to help. I think she was, I think she was from a generation where… That’s the advice you give to a younger woman coming into the office, um, or someone, you know, maybe not younger, but on their way.
But for me, it was, it was just like, it didn’t make sense. So then two weeks later, Mark Andreessen from Andreessen Horowitz, multi billion dollar fund. We started talking online because I wrote something that he thought was interesting at the time. Now, he’s blocked me since, so this is not going to be a warm and fuzzy, but at the time I wrote a blog post, uh, that he found to be interesting and he, I asked to speak with him cause he, he posted it and I said, can I, can I use, now that I have your attention, can I ask you one question in a DM?
And he said, sure. And I asked him, will you invest in the fund? And he said, send me the deck. And I’ll take a look. He looked at the deck. He saw a couple of people he recognized as investors, including Sam Altman, who runs OpenAI, because Sam is an investor at that point, and he gives him a call and Sam gives him a glowing review because he had been talking to me for a couple of years and within days.
Six figures is transferred to the bank account when I had just gotten started and I said to myself What if I had spent these last two weeks worried about my wardrobe and not getting my numbers right not knowing my the The deals I was that were in the hopper not understanding what I had envisioned me and I was all right So when, when he’s asking me these questions about, you know, what I have planned for the fund, what if I couldn’t have answered that because I was too worried about where I’m going?
Brenda Darden Wilkerson: That’s exactly right. And again, that’s…
Arlan Hamilton: Because he didn’t care.
Brenda Darden Wilkerson: It’s that, again, it’s that cognitive space that gets taken up by the things that are not important, and they are distractions, right? And I really, you know, when I read that, uh, in your book, I, you know, I’ve, I’ve gotten to a point in my life where I’ve had a lot of those… that type of advice. And, you know, and I let it I let it either, you know, make me feel bad or make me angry or distracted, or maybe I tried some of it before I changed my mind. But I’m to the point where now I realize that she was walking in the advice that she was given. You know, that was her, you know, right.
That was the space that she had been in. I’m not, I’m not agreeing with it, but it’s like, I begin to understand why people come at you from certain. Directions, right? But the key is that you, you took the time to think it through, try it on as it were, and you decided against it and look at the success you had. Just two weeks later.
Arlan Hamilton: Yeah. And not only that, there are millionaires and billionaires who I’ll see out and about and they’ll tell me, come back here. Let’s talk. And they’ll say, one thing I love about you is your uniform. They call it that, right? Like one thing about, like one thing I love about you is that you’ll walk into this XYZ space that has this certain dress code, but we know you’re going to wear this and I don’t do it on purpose.
I don’t do it to be seen as that. We’re not thinking about that. If people are doing stuff. Usually, not all the time, but usually they’re too busy working on their thing to worry about that, you know, your jeans aren’t, don’t look expensive.
Brenda Darden Wilkerson: Exactly. Exactly. And I, and I just want to, you know, I wanted to make a point here that those who are looking up at Arlan and seeing yourself see that too.
Right. I think that is an important, that is so critical. I mean, for the money you would have spent, right. And, but more importantly, for the time that you would have wasted, the time and the time and the space you would have wasted.
Arlan Hamilton: And I would have been cookie cutter. I would have been cookie cutter like everybody else, and I wouldn’t have had that distinction.
The things that have, like, there’s something deeper about that, because I had been recently homeless when we had this conversation. So, to me…What I’m wearing isn’t as important as long as it’s clean and it’s you know, I’m not showing a bunch That’s my kind of modestness, right? That’s I mean that was what mattered Because I’m like I know what it’s like to only if you have the same shoes for seven years until there’s holes in it You can’t walk on them again because I can’t afford another pair of 30 shoes And you know, so there was a deeper level to it. And if I had changed and tried to be somebody else, I would not have that unique thumbprint, that unique, interesting story that makes people want to write about me, therefore makes other people hear about me, therefore brings opportunity to 200 plus.
Brenda Darden Wilkerson: Which is another just like reason number 279 that I want our listeners to hear from you because all of this is, is, is the type of thing that you add to your [00:49:00] vault, right? You’re talking about adding to your vault, that knowledge level that you need to be able to make that difference that so many of us could, could do.
So I would love to, so you said you’ve invested in over 200 companies. Can you, I’d love for you to give a shout out. To one founder or one or two companies that you just absolutely love.
Arlan Hamilton: Oh, I love, I love them all. We’ll say for sure. Um, I talk to them all the time. I think two that I’m thinking of right now.
Well, Ooh, okay. I’ll just stick to two. There’s so many. Okay. So one of them is community. com and it’s kind of weird back in the day actually was there when they were first getting started because I was a mentor for a program that they were in but they’ve had a kind of a change so they started with two or three white young white guys who co-founded it and they built it to a really cool um company and you use it for text messaging your followers and Obama’s on it.
Both, you know, Obama and Michelle are both on it. And so many companies and brands are on it and influencers. But then about a year and a half ago, they brought in a black woman named Dianca Lanier, and she turned things around for them as far as like operationally. And so they asked her to be the CEO.
And now she’s the CEO. They have thousands and thousands of customers. They did tens of millions of dollars in revenue in 2022. Because she is a black woman CEO, we are, it fits our mandate and so we invested in them and she is just so impressive to me because she kind of came into, you know, an up and coming company, but she just took it to a different level and I think it’s a great example for people and it’s a really cool product that a lot of people can use. So I like that community. com is one of our more recent investments, even though I’ve been working with them for years. Another one is MAHMEE, M A H M E E. Because I know that when we go to Grace Hopper, you have 20, 000 plus women, nonbinary people.
And so, so many people are thinking about their children, are thinking about. Pregnant or are pregnant and mommy is I call it on star for for pregnant women They basically helps it gives you a lot of information and things about your pregnancy But it also helps track you and so they’re often Saving lives and that’s not a hyperbole. They’re often saving lives because they’re able to monitor things that the doctors are not. You have a baby. I have not had a baby myself, but this is what I hear. You can tell me if I’m wrong. You have a baby. You’re at the hospital for a few hours and then they just say, go home.
Go take the baby home and get out of here. And there’s no, there are books and things, but there really is no manual that they, a user manual. And so mommy, um, helps with a lot of those things like breastfeeding and all sorts of things. Um, works with doulas and has a lot of things online and in person. And in a subscription model, but what they also do is they track you and so they have been able to monitor and tell people when they didn’t even realize it themselves that they had postpartum depression and help with their get their their physician to give them medication or to diagnose it.
They were able to help people who have. Uh. Like, uh, blood pressure issues and things of that nature that are not necessarily known. And so they’re like an alert system for your whole, your whole birth team. Um, and you, you connect with them usually when, um, you know, you’re pregnant and then it takes you through like the first year of the baby.
And so Melissa at mommy and Deonka at community. com, two black women who are tackling things that are, you know, you’re talking about communication at. Scale and, um, pregnancy and motherhood and parenthood. It’s just important that they exist and important that they’re supported. Both of them are also incredible, um, operators.
And so they have raised, believe, you know, both of them have raised tens of millions of dollars and that’s, that’s, that’s not the most important thing, but it is pretty phenomenal in this landscape where it is so difficult to raise as an underrepresented founder.
Brenda Darden Wilkerson: Those are great. I can’t wait to look them up.
Thank you so much for sharing them. So just a couple more really important things I want you to share with our audience. So can you give our listeners some concrete ways that they can be the change from the top to the bottom? So let’s say that there is, there is one of those fun, those, those big funds who are companies that that provide the funds for the funds and they’ve been going along business as usual.
What could they do to make sure that more great solutions actually get funded or, you know, maybe someone who is an angel investor, they’ve been doing things, whatever the traditional way is.
Arlan Hamilton: There are two, two groups I think are interesting here. One is, one is the big fund manager. Who has a hundred million, a billion, whatever amount under management, or you’re part of the partnership that does, and I know some of them will be listening.
Um, and another is the LP, the limited partner who is among the group that I mentioned who invests in funds, and you can be an LP individually, or you can be an LP because you work at a company that looks at funds every year. And I talked to LPs in the hundreds every year. I talk to fund managers in the hundreds every year, and I think there’s something that’s pretty simple that can be done.
I’ve been trying to get people to do this for years, um, which is if you’re an LP or you’re a manager who has a large fund, that means you have the influence. You can influence LPs who want to be in your fund. Right? There should be a mandate among yourself, like among your own, uh, regulations that says that a certain percentage of your funds will go to managers of color of all genders and all backgrounds.
So, another thing, a very small thing that most people do not talk about, and it’s okay, but I’m gonna say it, is that a lot of times there is this model minority thing that happens. Where I’m going to invest in black people, but that means the one black man that I can find who went to Harvard next to me.
That’s not the same thing as what I’m talking about. You want it from different, uh, backgrounds and situations and profiles and you want more than one because we don’t, we’re not a monolith. You want it to be representative and The simplest way that I can see, and I, I may be simplifying this too much, but this, I think it’s the simplest thing in the world is to have a percentage of your assets under management that go to this group and to not only have that for yourself, but to recommend it to those who you fly with, because every family office I know knows a dozen other family offices, every corporate venture arm I know goes to conferences with every other corporate venture arm.
Right, every pension fund, every endowment I know knows hundreds of others. And so that is the simplest way. And I’ll also say this a lot of times when I’m, uh, faced with a group who is handing out funding or making funding decisions to other fund managers. And [00:57:00] it’s some sort of diversity initiative. I, again, you know, this is coming from me, this is my opinion.
It usually is run by a white man or a white woman.
I’m just gonna let you sit with that for a second. The money that you’re saying is going to DEI. That you’re so proud of, you put your press release out, you’re then giving it, putting in the hands of usually one white man or one white woman to then interview 70 to 100 fund managers of color, which is exciting that that exists today, which it didn’t 10 years ago, but you’re having them jump through hoops.
To then, based on your one opinion, either your opinion, or some sort of metric that is almost impossible to meet. Right? I want to invest in early stage, uh, underrepresented, uh, GPs, general partners of funds, but they must have 15 years experience and a track record of exits. That doesn’t make sense, but it’s what I see all the time.
So you can be the change. By doing what’s right and what makes sense and what’s reasonable because even if you, if you look at it, like the, I don’t agree with Paul Graham on most things, the founder of Y Combinator, but one thing, if you look at when he started Y Combinator, he gave these geeky dudes.
Mostly white, again, he gave them a few thousand dollars and he gave them mentors and he had those mentors pick up the phone and walk them into places and they all started Reddit, Stripe, Airbnb, Dropbox, they were all the little geeks in the back of the room, they were who were given a chance and were given keys to a closed door.
So you’re not doing this because it’s out of the goodness of your heart. It simply hasn’t been done well enough and enough of it.
Brenda Darden Wilkerson: Yes.
Arlan Hamilton: That’s why we’re here. That’s why Backstage exists.
Brenda Darden Wilkerson: That’s awesome. That’s awesome. Well, I think this is part one of our conversation together, Arlan Hamilton, and I want to thank you so much for your time.
Thank you to everyone who’s listening. Is there one thing that you want our listeners to know that’s up and coming for you, that you want them to keep their eye out for as we close?
Arlan Hamilton: Oh, there’s so much, but I would say definitely if you have not picked up, it’s about damn time. Check that out. I also have a podcast called Your First Million that I love.
I like to interview people and we got it.
Brenda Darden Wilkerson: I’ve been on it before.
Arlan Hamilton: So definitely listen to that. It’s also have a video version of it and another podcast that’s scripted called The Valley. That’s about It’s sort of the seedy underbelly of Silicon Valley, but it’s really soapy and fun and really exciting. And it’s on Realm, um, which is home of the Orphan Black reboot, which is one of my favorite podcasts.
So there’s a lot of podcast audio material from my book, a lot of things. If you love this medium that I love to work with.
Brenda Darden Wilkerson: Awesome. Make sure you check them all out. Thank you, Arlan
Arlan Hamilton: Thank you.
Brenda Darden Wilkerson: I want to thank Arlan Hamilton once again for speaking with me on this episode of Be the Way Forward. Now, if you enjoyed our conversation, then please follow Be the Way Forward wherever you listen to your podcasts.
And you can also watch video episodes of this podcast on AnitaB.org channel on YouTube. For more on how you can B The Way Forward, head on over to AnitaB.org. B The Way Forward is produced by
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