Two local startups have received funding from Backstage Capital, a Los Angeles, California-based venture capital firm that has been making headlines nationally for its focus on investing in minority entrepreneurs.
Minneapolis-based HabitAware and St. Paul-based Civic Eagle are among the first 100 startups to receive investment from Backstage Capital, the firm announced last week. HabitAware makes a smart bracelet that helps wearers overcome subconscious behaviors, such as hair pulling or skin picking. Civic Eagle creates a SaaS platform for political advocacy that helps users track, discuss and predict political policy outcomes.
Across the tech industry as a whole, startups led by women accounted for around two percent of the $85 billion in venture dollars raised in 2017. Companies with founders of color or those who identify as LGBT received even less. Backstage says that of the 100 companies in its portfolio, 68 percent include a female founder, 62 percent include a black founder, 8 percent include a Latinx founder and 13 percent include an LGBT founder.
Backing at least 100 startups led by underrepresented founders has been a goal for Backstage Capital since its inception. Founded in 2015, the firm hoped to reach this milestone within five years. Last month, Backstage Capital met its goal – a year and a half early.
To date, the firm has invested more than $40 million in its portfolio companies. Having exhausted the last of its first three funds to back its hundredth startup, Backstage will now focus on its recently announced $36 million fund that will invest exclusively in companies led by women of color.
"With Backstage, more important than the funding is the movement we now belong to"
Backstage did not say how much it invested in the 100 companies currently in its portfolio. HabitAware co-founder Aneela Idnani Kumar declined to disclose Backstage's exact investment in her company, but said that the firm typically invests between $25,000 and $100,000.
"With Backstage, more important than the funding is the movement we now belong to," Idnani Kumar told Minne Inno.
She added that members of the Backstage crew have started to invest time and expertise in areas like marketing and fundraising in HabitAware and other "Headliners," the name Backstage gives to its portfolio companies.
"Backstage is on a mission to empower those that were marginalized by typical VC culture," Idnani Kumar said. "To be a Headliner is to embody this mission and apply it to the problems we see in the world."
