Try to picture a prototypical tech investor. If you’re in the tech world already or if you watch “Silicon Valley” or read the business pages, you’re likely envisioning a genial-looking white guy. Maybe a little nerdy, Bill Gates-y. He probably has a degree from Stanford or maybe Harvard, possibly MIT.
Arlan Hamilton is nothing like that.
“I’m black, female and gay,” she told The Huffington Post by phone recently. “I am a triple threat to a lot of people, but not in a Beyoncé way.”
Still, on Thursday, Hamilton officially became a tech investor. After years of trying to break into the venture capital world, the 34-year-old Dallas native launched her own “syndicate” -- an early-stage investing fund on AngelList, a website for angel investors and startup founders.
Her fund’s goal: early-stage investing in underrepresented founders. Hamilton is looking for entrepreneurs who are black, Latino, gay or female -- the kind of people who typically miss out on the money sloshing around Silicon Valley these days. Hamilton believes she’s the first black woman to lead a syndicate on the startup site.
Tech companies and venture capitalists are talking a lot these days about getting more women and minorities into the tech pipeline, sponsoring programs to teach girls to code or making sure to interview more women and minorities for jobs, like Facebook is now doing. But a fund like Hamilton’s is another piece of the puzzle. The diverse startup founders she backs can turn into the big-tech CEOs of tomorrow -- and they’ll have diversity baked into their DNA. Meanwhile, Hamilton serves as inspiration for anyone looking to break into the ultra-exclusive investing world.
"Anytime you have a visible example, someone you can point to and say here’s someone unusual doing something different, it opens up opportunities for others," Susan Kimberlin, a former Salesforce product manager who is now an early-stage investor and startup adviser, told HuffPost. "It’s like, 'Oh look, if that person can do it, so can I.'"
I’m black, female and gay. I am a triple threat to a lot of people, but not in a Beyoncé way.
Hamilton’s fund is relatively small. She plans to take investments as low as $1,000, with the end goal of rolling those up into a VC-sized fund of between $100,000 and $250,000 per company. She'll help entrepreneurs who are just starting out and need that little bit to keep going, as well as more seasoned founders. Major VCs don’t typically work in such tiny sums.
"A lot [of companies] aren’t ready for $1.5 million, but they may be dead in the water if they don’t get something," Hamilton said, explaining that not all founders can just raise cash from friends and family. That's not a possibility" for a lot of people who didn't just graduate from an Ivy League school, she points out. Those people don't have as much luck with venture capitalists or angel investors, but they have just as many good ideas.
“Black founders do not get money compared to white founders. The fact that she’s directing attention and making a material difference to these companies is huge,” said Kimberlin, who met Hamilton at a course for new investors given by 500 Startups, a well-known incubator, and has been helping her launch the fund.
A band tour manager who’s worked on shows with stars like Pharrell and Justin Timberlake, Hamilton started thinking a few years ago about the venture capital industry after reading interviews given by Troy Carter (Lady Gaga's former manager), Scooter Braun (Justin Bieber's manager), Guy Oseary (Madonna and U2's manager), and Ashton Kutcher.
She also saw that Ellen Degeneres was doing investing and was inspired. (Hamilton simply calls her Ellen -- "I'm a lesbian and we don't need her last name. She's like Madonna. Or Mothership," she told HuffPost.)
Intrigued by how VCs invest in entrepreneurs and help them grow, she wanted in.
Hamilton, who was voted most likely to succeed in her Dallas high school but didn’t make it to college, started cold-calling bigshot VCs, eventually signing up for a class at 500 Startups.
Inspired by the class, she wrote a blog post on Medium about the lack of diversity in the venture world. It was blisteringly honest: The VC world was too white and missing out on huge opportunities from entrepreneurs of color, who were having a harder time raising funds.
“DEAR WHITE VENTURE CAPITALISTS: DO NOT PITY BLACK FOUNDERS!” she wrote. “Do the same thing you do with white and Asian founders and invest in them because you want to make money. Do not think of this as a social mission.”
The responses from VCs rolled in. There were some quasi-job offers from firms, she said, but nothing that paid very much or put her at the heart of the deal-making universe. Hamilton had made a hobby out of reaching out to small business owners and connecting them with investors she had met, but it wasn’t paying off. “The investors would go for it and I’d get a pat on the head,” she said. “I didn’t want to be on the sidelines.”
She’s not on the sidelines anymore. By Thursday night, Hamilton already pulled in $19,500 from five investors -- including a partner at 500 Startups, a former Googler and a designer from Adobe. Investors pay Hamilton 15 percent and AngelList 5 percent of any profits they make.
"Using AngelList is also a brilliant way for Arlan to start making an impact right away," Sean Percival, the 500 Startups partner who's investing in Hamilton's fund, told HuffPost. "It challenges the traditional path one might become a venture capitalist, and that’s something we support."
Hamilton wasn’t ready to name the companies she plans on backing, but she’s excited about the possibilities. “There’s such potential in tech. We’re just scraping the surface."