For some time now, the hype has been ahead of Arlan Hamilton, the indefatigable founder of venture firm Backstage Capital. When she announced the formation of her $36 million fund in May 2018, it was widely hailed as the first venture fund to invest specifically in women of color. But Hamilton's fund didn't quite exist in May, at least not at $36 million.

As an Axios story made clear on Tuesday, Hamilton hadn't actually closed on the fund at the time she announced it. In fact, Hamilton said the fund has yet to close, after "two separate anchor investors" declined to invest. That story also said that an "operations deal" for Backstage with Renault/Nissan fell through after CEO Carlos Ghosn was arrested in Japan. Hamilton said some would-be L.P.'s were "waiting until we have more traction," to invest. On Tuesday, Hamilton announced to her staff that she'd be stepping out of much of the day-to-day operations of the fund.

The result: layoffs at Backstage, and a pivot to Backstage Studio, the fund's accelerator. Even though Backstage will now put more emphasis on Studio, Hamilton will no longer be Studio's CEO.

In a memo obtained by Fortune, she tells staff that she will instead focus on "brand and vision evangelizing, raising assets under management, and mentoring my team." A podcast and a book are both in the works. Hamilton says she is "most comfortable" doing speaking engagements, so there will be more of those, too. In a series of tweets Tuesday, Hamilton says, "The truth is, I was doing the work of 4 people. Now it's 1." Later, she posted, "Fortune made it sound like I'm going on a speaking tour and vacay. Furthest from the truth." A podcast, released Wednesday, did mention working with founders.

Ever since raising her first fund in 2015, Hamilton has been unusually high-profile for a venture capitalist. Venture capital is extremely clubby, and Hamilton broke through with almost missionary zeal, insisting on the potential of women, people of color, and the LGBTQ community as entrepreneurs. While most VCs have bland, rarely-updated Twitter feeds, Hamilton's offers a blow-by-blow of her public appearances, as well as her thoughts on politics, her favorite television shows, and yes, dinner. Last year, she landed on the cover of Fast Company magazine, and was chronicled for an entire season of Gimlet's Startup podcast. Arguably, her entrepreneurs--female, people of color, and LGBTQ--are more in need of a highly public champion insisting that yes, they too can succeed.

But even to a casual observer, it has been clear that Backstage--and Hamilton--have been spread thin. With its first fund, totaling about $5 million, Backstage had invested in 100 companies. That no doubt made a huge difference to the under-represented founders that Backstage supports, and who often get a cold reception from traditional venture capitalists. But it's also a ridiculously large number of relationships to nurture, especially for a small fund.

Then there is Backstage Studio, the fund's accelerator. This spring, it started opening locations in Detroit, Philadelphia, Los Angeles, and London. But accelerators are expensive, and Backstage was operating out of a relatively small fund. So the accelerators were partly backed by corporate sponsorships, which again, meant more relationships to manage. Meanwhile, Hamilton was trying to raise the $36 million fund.

In her new role, it seems that Hamilton is doubling down on being the public face of the effort, rather than on the day-to-day work of finding young companies. Of course, for any venture capitalist, a big part of success is attracting deal flow, and given her unique ability to get Backstage into the public eye, Hamilton's new role as ambassador should only help bring continued visibility to the plight of under-represented founders. It will also give continued visibility to her, and her growing personal brand.

Published on: Mar 20, 2019