The venture capital world can be quite intimidating for ambitious founders looking for funding, especially those among underrepresented groups that are often left out of those opportunities.

Back in 2015, Backstage Capital founder, Arlan Hamilton set out to create a venture capital fund that offered more opportunities for people like her –– Black, people of color, women, LGBTQIA+. In turn, she founded a company that in five short years has invested in over 150 underserved founders.

As Backstage Capital celebrates its fifth impactful year in business, the firm has also released a five-year recap report — developed by The Plug and its contributors Sherrell Dorsey, Ashley Black, and Gizelle Clemmons — detailing all the progress it’s made in the venture capital world and its communities.

Commissioned by Backstage and prepared by @Sherrell_Dorsey and @tpinsights, our 5 Years of Impact Report is live!

It details our impact from 2015-2020 and what’s next for us. Check it out:https://t.co/zt3aRsXjpc pic.twitter.com/x0XYzBkLm9

— Backstage Capital (@Backstage_Cap) November 19, 2020

The five-year report shares background research, survey data, and stakeholder interviews that dive deep into the past, present, and future
of diversity and inclusion in venture capital as well as Backstage’s influence in the field.

Although it seems VC is moving toward more diversity and inclusion for founders that come from marginalized backgrounds, the report shares most interviewees commonly feel the progress made so far is only a fraction of what needs to change across the board.

According to Backstage Capital’s report, “respondents characterize most VCs as risk-averse with a narrow worldview, rarely funding businesses that
meet the needs or serve communities outside of their own
immediate spheres of reference.”

Unfortunately, many VC firms overlook and undervalue qualified diverse founders because they don’t meet their typical standards, i.e. white and male with a certain level of college experience.

According to a 2018 report outlined by DiversityVC and RateMyInvestor, research shows that 9.2 percent of venture-backed founders are women, 1 percent are Black, 1.8 percent are Latino/x, and 2.4 percent are Middle Eastern, compared to the 17.7 percent that are Asian and 77.1 percent that are white.

Additionally, according to a 2016 Cornerstone Capital Group report, 14 percent of venture capital investments go to LGBTQ founders.

Despite these low diversity statistics among founders, Backstage Capital’s report shares that decades of research reveal investing in underserved markets consistently generates better results that outperform the market.

In an effort to rectify the industry’s diversity issue, Hamilton has made it her mission to call out clear bias for funds that short-change diverse founders, ultimately contributing to Backstage Capital’s greatest impact on the VC ecosystem.

Over the years, Backstage Capital has invested in several companies including Bitwise — a tech solution helping to activate human potential and elevate small cities across America; Akash Systems — which works to offer universal and low-cost access to the internet; CurlMix — a clean beauty brand for curly hair; Carrot Fertility — a company making high-quality fertility care accessible for all; and more.

With a focus on highlighting and funding underrepresented founders, the firm’s influence has been able to “create a pipeline to funding, entrepreneurship, and wealth creation for people who come from historically oppressed and repressed backgrounds,” the report states.

Data from Backstage Capital’s report also shares a thread highlighting its history and current landscape.

Backstage Capital — alongside some of its peers such as Black Angel Tech Fund, Precursor Ventures, MAC Ventures, and Harlem Capital Partners to name a few — has been an influential pioneer in the industry’s shifted focus to serve diverse founders.

In the past five years, the firm has raised $5 million in funds 1-3, which translates to creating over 1,000 jobs, raising over $0.5 billion with its portfolio companies, and even accomplishing its goal of making 100 founder investments by 2018 — two years ahead of its initial mark.

Additionally, its report also disclosed that of the 164 founders it has invested in, 56.7 percent were WOC, 65.9 percent were POC, and 9.2 percent were a part of the LGBTQ+ community.

Looking ahead, Backstage Capital has a plan to focus on developing its new
rapidly-growing syndicate, Backstage Crowd — a three-month old platform that has raised over $1 million so far with over 2,000 investors.

Backstage Capital wishes to continue being a pillar for diverse founders in the VC ecosystem while also providing greater access to capital for startups.

To read its full impact report, click here.

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