Backstage Capital Opens Fund to Everyday Investors
Backstage Capital, the Los Angeles venture firm founded in 2015 by Arlan Hamilton to focus on underrepresented founders, flung itself open to mom-and-pop investors and they quickly smashed down the doors. The firm launched a crowdfunding page Monday with the goal of bringing in slightly over a million dollars by the end of April, with investments ranging from $100 to $50,000.
By Monday evening, it had already raised more than $700,000 from more than 1,000 funders eager to invest alongside the likes of Sequoia Capital and Initialized in Backstage's long roster of consumer-focused startups.
The campaign comes as corners of investing that once were restricted to wealthy individuals have opened up to the masses. Before 2016, one had to make more than $200,000 per year or have investable assets of $1 million or more to invest in a private company. The SEC further loosened the rules last year, increasing the cap on what companies can raise annually from $1.07 million to $5 million.
Crowdfunding campaigns have been an increasingly common route for startups to raise venture funding, which has coincided with the Robinhood trading boom that fueled the recent GameStop frenzy.
But individuals investing in a venture firm – normally the province of family offices and pension funds – is something else entirely.
While Backstage's crowdfunding page is heavy on generalities about the firm's mission, it does not include any specifics on Backstage's financial performance, which like other venture firms is a closely guarded secret. Harlan did not respond to a request seeking comment.
"We would like to give everyday investors who share our values the opportunity to be a part of the Backstage journey and help us deploy more capital to underestimated founders," the firm said on its crowdfunding page.
Backstage has raised more than $7 million in dry powder since 2015 – which does not include Monday's haul – and invested in more than 130 startup companies, led by what it describes as "underestimated" founders.
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