Although the venture capital world statistically excludes Black women like Arlan Hamilton, that didn't discourage her breaking into the field. "I saw a world that felt like I did on the inside," says Hamilton. "I saw passion, moon-shot thinking, optimism that was unbridled, and creativity that couldn't be measured."
Hamilton, a trail-blazing venture capital investor who recently published the book It's About Damn Time: How to Turn Being Underestimated Into Your Greatest Advantage (Currency), spoke in an exclusive Inc. stream event with Tom Foster, Inc. editor-at-large. They discussed her personal and entrepreneurial journey, as well as her vision for funding underrepresented startup founders.
Hamilton says she first learned about Silicon Valley when she was working as a tour manager for indie musicians. She heard about the musicians' and celebrities' fascinations with the tech world as she roamed the back halls of concert venues while on the road touring. She was interested immediately.
She dove into research on venture investing--which included reading Inc. magazine. Hamilton learned that 90 percent of funding goes toward white male founders and set out to found Backstage Capital, a venture firm focused on investing in companies with founders who identify as women, people of color, or LGBTQ.
Unlike most venture firms, she says, Backstage has an application on its website, open to anyone and with no preliminary introduction needed. While there's bias in Silicon Valley, venture capital is a world of opportunity that is meant for everyone, she says. The perception that venture capital is closed to minorities has truth to it, but it is also "just a marketing issue," she says. "This is just somebody's mistake."
Having gone from poverty to raising and making millions of dollars in the past five years, Hamilton defied the odds stacked against her.
Redefine what success looks like
Hamilton advises entrepreneurs meeting with investors to know their value before entering into the room. Where do you come from? Who are you? What are your strengths? If you get a "no," you will still be you, she says. "It's not about proving them wrong, that I can be better than they think I am. It's really up to them to prove that they can be better than what I imagined," she says.
"We have been programmed to believe that a lot of things that are, quote-unquote, 'the default setting in the United States' are supposed to be the standard," she says. When negotiating with investors, you can find leverage when you're OK with not winning and accepting "no."
Let people underestimate you
The word underrepresented has a connotation of "less than," says Hamilton. She prefers the word underestimated. Underestimated connotes challenge and untapped potential. If you enter the boxing ring, she says, and your opponent thinks they are stronger than you, they may be taller for example, but you know you have a great right hook, let them underestimate you, she says.
Hamilton recalls sneaking into an Inc. event and having a conversation with venture capital investor Chris Sacca about investing with Backstage Capital. She was the only Black person in the audience, she says. "You can change your circumstances, and I think that framing of 'underestimated' is the perfect way to do it," Hamilton adds.