Women’s work: Voices for change converge at SXSW

SXSW featured session with Arlan Hamilton, founder and managing partner, Backstage Capital

“With no money and no connections and no background,” Arlan Hamilton built a venture fund from the ground up. Interviewed by KC Ifeanyi, associate editor at Fast Company, for a featured session at the SXSW Conference in Austin, Texas, Hamilton shared how she built Backstage Capital.

As an aspiring entrepreneur, Hamilton said she saw the pattern in Silicon Valley – mostly white men were getting introductions to investors and others weren’t. As a gay, black woman, she wouldn’t let the status quo stop her from starting a business, but she realized that just starting a business would have been short-sighted. She saw the competitive advantage of diversity, and set out to launch Backstage Capital, which began funding women, people of color, and LGBTQ entrepreneurs in 2015.

Her goal was to fund 100 companies by 2020, and a year early, Backstage Capital has already reached its goal. “The people were already there. It wasn’t something I was hoping I could find, they were already there and being incredibly overlooked and underestimated,” Hamilton said.

Backstage Capital launched an accelerator program that is now in four cities – Los Angeles, Philadelphia, London, and Detroit – and has invested more than $4 million into its portfolio of companies made up of people “who have done more with less,” she said. “The advantage that any of us have who are underestimated can’t be underestimated – you don’t see us coming.”

Hamilton said the fact that they exist is success. “That’s our sweet spot. We’re betting on those who have hacked their way there.”

SXSW session on Womanhood, Motherhood, Entrepreneurship with Zubaida Bai, founder, Happy Woman Foundation; Jonathan Hera, managing partner, Marigold Capital; Sarah Hinawi, CEO, GELL; and Sharmistha Ray, artist

Gender bias is magnified for mothers and woman of color and the SXSW panel, “Womanhood, Motherhood, Entrepreneurship,” reminds us that womanhood and motherhood are not a hindrance to entrepreneurship but essential in creating a healthier, wealthier, and more equitable world.

“Our structures are biased against women as the strengths that women are [traditionally] cultivated to have aren’t valued in the workplace, in the interview process, in an attempt to get capital. Empathy is one of those values. It’s not looked at when considering how successful a woman would be,” Zubaida Bai said.

Kauffman’s 2016 report, “Labor After Labor: Why Barriers for Working Mothers are Barriers for the Economy,” addresses the systemic challenges women, and specifically mothers, face in the workforce and in starting businesses.

Foremost is confronting these economic and social challenges not as a “women’s issue,” but as a problem for the American workforce and the economy overall. “Both women and men are caretakers of children. We need to shift that conversation. We need to create equity and opportunity for all,” Bai said.

The significant economic value women have contributed to the United States is in spite of the lack of supportive policies. This imbalance extends to funding as well. A recent Kauffman report, “The State of Access to Capital for Entrepreneurs: From Barriers to Potential,” shows that all-women founding teams raised about 2.2 percent of total venture capital funding in 2017 (accounting for under 5 percent of deals), compared with all-male teams raising about 79 percent and mixed teams raising about 12 percent. A recent study found that men were significantly more likely to secure funding than women when pitching the same business content; women have also been shown to use significantly less capital at startup than men (in 2004: $54,375 for women vs. $80,285 for men).

“Think about stress, handling objections, time management, delegation, creativity, ability to ask for help, collaboration, comfort in taking calculated risk – these are all skills that get work done. A traditional VC might look at these things [womanhood, motherhood] and think ‘un-investable,’ but there’s a ton of data to tell us that’s not true,” Jonathan Hera said.

“Backing moms is a powerful opportunity, it’s more than just backing women. It’s more diverse products and services. It reaches new target markets. Investing in mom-owned businesses mean better employment practices, higher retention, more ethical supply chains, and greater outcomes.”