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Behind the scenes Capital cuts most of its staff after halting net new investments TechCrunch


Behind-the-scenes capital reduced personnel from 12 to 3, managing partner and founder Arlan Hamilton said while she Podcast “Your First Million” was published on Sunday.

The layoffs come almost three months after Backstage Capital narrow its investment strategy to participate only in subsequent rounds of an existing portfolio. These workforce cuts underscore how the venture capital firm is struggling to thrive, both internally and externally.

“Not that I feel like there was any kind of failure on the fund side, on the company side, on the Backstage side, which could have been avoided if the systems were different if the systems we worked on were different.” Hamilton said in the podcast.

Hamilton did not respond to TechCrunch’s request by email for further comment.

Backstage announced in March, it pivoted to funding only companies with existing portfolios and will no longer make new investments. At the time, Hamilton said that “there will be people who will interpret this negatively or will see this as we are not active, and that’s anything but.”

It’s rare to see a company say it’s increasing assets under management while rejecting new investment, especially considering it has fresh funding from Comcast and has submitted a plan to a $30 Opportunity Fund. millions of dollars. We now know that Backstage doesn’t have much dry powder left, so it shows a general slowdown for the company.

In the podcast, Hamilton said that the changes “have come at a cost; It was a period of depression, decline. She also said that she had been medically exhausted for at least three years.

Saying she’s grateful for the support so far, Hamilton also expressed her disappointment with LP, adding that Backstage has found itself in a “purgatory position” because of some investors. felt it had all the support they needed. However, that is not necessarily the case. Hamilton said that Apple told Backstage the fund was too far away to invest in, while JP Morgan said it wasn’t far enough.

Without more support, it will be difficult to close new investments, manage more assets, and bring in more follow-up investments.

“Someone asked me, ‘why don’t you manage more?’, she said in the podcast. “You have to ask these LPs, you have to ask these family offices, you have to ask people who ask me, ‘how can I be helpful,’ and I say ‘invest in our funds,’ and I never got a response from them again.”

TechCrunch noted that LP needs to take more responsibility Where and to whom is their money deployed. Such an impact could be a seismic one, especially for companies like Hamilton, which specializes in funding overlooked founders. But alas, the lack of support from the top of the VC food chain causes a domino effect – where diversified fund managers don’t get enough capital, i.e. diverse founders neither.

In the podcast, Hamilton said that she still plans to increase Backstage’s assets under management to more than $100 million. Because the company doesn’t have “dry powder right now,” Hamilton told the founders to consider some of the 26 funds she’s invested in as potential investors.

To date, Backstage Capital has invested in 200 companies, all led by historically overlooked founders, and have gained over $20 million in assets under management over six years. Most recently, Hamilton founded recruitment startup Runner, which raised about $1.5 million from multiple investors, including Backstage Capital.

In addition to Hamilton, general partners Christie Pitts and Brittany Davis remain employees of the main fund. Hamilton says the duo are working on a special project, which she will announce very soon.

Current and former Backstage Capital employees may contact Natasha Mascarenhas via e-mail at natasha.m@techcrunch.com or on Signal, a secure encrypted messaging app, at 925 609 4188, or Dominic Madori-Davis at dominic.davis@techcrunch.com or on Signal at 646 831 7565.





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