Backstage Capital, which invests in underrepresented founders, has cut all of its operational staff after it ran into fundraising challenges, according to founder Arlan Hamilton.
Hamilton spoke Sunday on her podcast about the changes, which reduced its staff from 12 to three. Besides Hamilton, the other two who remain are general partners Christie Pitts and Brittany Davis, who are working on a "special project," Hamilton said.
In May, Backstage announced that it had stopped making new investments and would only make follow-on investments. But it said it was still seeking to raise a $30 million opportunity fund.
The firm, which has invested in 200 companies, has raised about $20 million over its six and a half years, Hamilton said on the podcast. Backstage was one of the earliest firms focusing on minority and underrepresented founders, who have traditionally faced challenges raising funding in the venture industry.
Backstage also raised close to $5 million in a crowdfunding campaign through Republic. That funding gave investors a stake in the Backstage management company, but not Backstage's investment funds. The crowdfunding campaign's disclosures anticipated that 30% of the money raised would go to paying off accumulated debt.
Hamilton, in the podcast Sunday, described challenges raising funds from entities including Apple, J.P. Morgan and PayPal, while praising Comcast for providing funding.
The firm's operating budget was about $3.5 million to $4 million per year, Hamilton said in the podcast, adding that she would put up about a third of the funds herself. Hamilton has invested in 26 emerging managers as an LP, she said on the podcast.
"It's not that I feel like there's any sort of failure on the fund side, on the firm side. It's that this could've been avoided if systems we work within were different," Hamilton said on the podcast.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE