Since its founding three years ago, venture firm Backstage Capital has been on a mission to prove that companies led by women, people of color, and LGBTQ founders are equally deserving of investment dollars. Earlier this year, the firm passed a critical milestone: 100 investments of $25,000 to $100,000, all directed toward underrepresented entrepreneurs—or “underestimated” entrepreneurs, as Backstage founder and managing partner Arlan Hamilton likes to say.
Now, Backstage is turning its energy toward accelerators, the engines that drive startup ecosystems in Silicon Valley and other innovation hubs. Today, the firm is unveiling plans for a four-city accelerator program that will begin accepting applications this fall. The Backstage Accelerator, as the program has been named, will operate out of London, Los Angeles, Philadelphia, and a fourth city, to be determined by popular vote.
“We’ve attempted to be the scout for diverse founders of these [top] accelerators,” like Y Combinator, 500 Startups, and TechStars, Hamilton says. “After seeing 3,000-plus companies [apply for funding], I felt we were ready to do it ourselves.”
Companies accepted into the program will receive $100,000 in exchange for 5% equity stakes. As at other accelerators, they will be provided with workspace, mentorship, perks via corporate partners, and educational programming over the course of an intense three months. Backstage expects to accept six companies per city into its first cohort, which will begin the program in spring 2019.
In one area of program design, at least, Hamilton expects the Backstage Accelerator to stand out: Demo Day. “I think that too many accelerators are focused on just getting you ready for Demo Day—it’s like standardized tests in schools,” she says. “We’ll have investors meeting with companies throughout the cohort, and not putting any sort of embargo on when they can raise.” She is also pushing her team to consider offering benefits like childcare, in order to encourage applicants who might otherwise be deterred by an accelerator’s demands.
“Existing accelerator programs have really shaped the narrative around what it means to be a successful early-stage company, but they haven’t been inclusive,” says Backstage general partner Christie Pitts. “They may have one or two founders per batch that are ‘diverse,’ but the narratives of success don’t align with the needs that underrepresented founders have. The growth at all costs narrative, for example. That’s antithetical to the needs that underrepresented founders face.”
To develop the program, Backstage has brought in Wayne Sutton and Melinda Epler, founders of Change Catalyst, a consultancy that works with technology companies on issues of inclusion, and Mark Levy, who previously led the global employee experience team at Airbnb.
“You look at the history of Silicon Valley, and the power, the money, the access has been controlled by one dominant group,” Sutton says. “It’s hard for a group that has historically had that much power and influence to let other people in the door.” Along with Epler, he plans to create a curriculum for founders, as well as a complementary curriculum for mentors and investors.
Backstage Accelerator participants will also gain access to resources provided by Microsoft and MailChimp. Microsoft, for example, will offer the participants its Microsoft for Startups package, which includes perks like a credit for Azure, the company’s cloud offering.
“I wanted to take action to create much greater diversity in our investments, including founders of color,” says Jeana Jorgensen, general manager for the commerce and ecosystems team at Microsoft. “What made Arlan stand out is her approach to changing the industry.”
In addition to the accelerator, Backstage is in the midst of raising a $36 million fund dedicated to black women founders. The company expects to announce its first two $1 million investments from that fund before the end of the year.AH