Home Venture Capital Arlan Hamilton Is Showing You How To Make Your First Million

Arlan Hamilton Is Showing You How To Make Your First Million

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This founder used to have severe stage fright, and today she is one of the highest paid and most requested speakers in tech in the U.S. This founder was homeless and used food stamps up until her thirties, and now has raised nearly $30 million. This founder had no college degree or connections in Silicon Valley, yet today has managed to invest in 200 startups.

This founder is Arlan Hamilton of Backstage Capital, a venture capital firm whose mission is to invest in underestimated founders. As a Black, gay woman from the South breaking into the world of venture capital where less than 2% of funding goes to startups led by women and minority leaders, Arlan Hamilton knows what it is like to be underestimated.

She chronicled her path of going from homeless to being a trailblazer in the venture capital world in her 2020 book, It’s About Damn Time: How To Turn Being Underestimated Into Your Greatest Advantage. Hamilton just released her latest book, Your First Million: Why You Don’t Have To Be Born Into A Legacy of Wealth To Leave One Behind. Hamilton’s goal is to help create 1,000 more millionaires in the next decade. While she wants to increase access to funding for underestimated founders, she believes a key to creating generational wealth is the path to ownership via entrepreneurship.

“The more I see and experience, the more I know that [my work] really can’t only be about investing in other people; it has to also be about the ability for those people to make their own money and generate their own revenue,” says Hamilton. “I learned from going from being homeless and on food stamps to raising and generating millions of dollars that the ability to become a millionaire can be taught, just like building muscle. And once we have more underestimated founders creating their own wealth, we’ll have a fighting chance [at equality].”

When asked how she overcame obstacles of all kinds, such as housing insecurity or bias or a lack of networks, Hamilton’s answer lies in something we all have the ability to cultivate: a mindset. A mindset that herself and everyone else are equal, because we are all human beings, while at the same time having “radical self belief.”

In Your First Million she writes, “Radical self belief is the knowledge that whatever you’re being paid, it’s not enough. Whatever power you have, you can always have more, and there’s more than enough to go around. We’ve been taught that we can’t be what we can’t see, but I believe that mindset is limiting. We have to understand that we can be anything.”

In a world where impostor syndrome is accepted as par for the course and cynics are viewed as realists while optimists are often viewed as naive, Hamilton has combined the power of imagination, confidence, grit, and resilience to overcome odds others might have seen as insurmountable.

“If you can imagine it and believe it, you can be it,” says Hamilton. “I kind of had to be delusional on purpose in 2014, when I was staying at a Comfort Inn in Texas where I was sharing a room with my mom. She was in her 60s. I was in my 30s. Every single day, we’re going to the front desk to ask if we can get an extension to stay another day, waiting until Wednesdays when there’s free chili because we know we’ll eat that day. At the same time, I’m talking to founders and learning about their products so that when I raise my million-dollar fund—somehow, somewhere—I’ll be able to invest in them. You have to be a little delusional to believe that’s even possible, but it got me through it.”

Here are some key takeaways from my conversation with Hamilton about her new book, and how she is helping to level the playing field for other underestimated founders.

On the difference between a calling and a dream…

“A calling is something that pulls at you, and a dream is more you chasing it,” says Hamilton. “I think dreams are very catalytic and help you with momentum. A calling is something that I had not personally felt until I was in my mid-thirties and I’m 43 now. I felt it when the idea of working with founders at scale in order for thousands of other founders who themselves could also affect thousands or even millions of people, you can’t even measure that impact. It wasn’t like I woke up one day and said, ‘I want to be a venture capitalist,’ but I did wake up one day and say, ‘I want to get more resources into the hands of underestimated founders who are deserving and who themselves can go on to do much greater things than I could by myself.’”

On growing your confidence…

Hamilton has said underrepresented people don’t have time to worry about imposter syndrome because they have a lot of time to make up for, so it’s imperative that they know their worth. In Your First Million she writes that when you’re looking for someone to emulate and you can’t find anyone you can relate to, take that as a sign that the person you’re looking for might be yourself.

“If you’re lacking confidence, mentally take the other people who are proud of you or the people who are rooting for you or the people who you’re helping into the rooms with you,” says Hamilton. “That’s what I did. It was the only way I would have really been able to survive certain aspects of rejection, disappointment, and loss to have the spiritual and mental fortitude to do it. I was like, ‘This is for other people who are really deserving of these opportunities and who haven’t historically had them.’”

On finding a way around…

Hamilton believes there is always a solution if you look hard enough and think creatively enough. For example, to keep Backstage Capital’s lights on after a $5 million pledge to invest in her company fell through, Hamilton worked to push through ground-breaking Regulation Crowdfunding to allow people ownership in the management company of a private venture fund such as her own.

“So what that means is 6,500 people invested approximately $5 million over an eight-day period in Q1 of 2021 to now become partial owners of Backstage Management Co., which shares in any upside that we have as a fund across any investment we’ve ever made in the past and will ever make in the future, as long as they hold that stock,” Hamilton said in a Time magazine article.

On the power of community…

After mindset, Hamilton believes connections and community are key to achieving your first million, because no one can be successful all by themselves. She says having a wide network is one of the best ways to increase your value, but not for the traditional reasons you might think: Every new person increases the number of people you can connect one another with and who in turn can connect you.

“What stops me from being hungry or homeless again is not my wealth; it’s my network. It’s like a shield around me. In exchange, I’m proud to be part of so many other shields as well,” says Hamilton.

To catalyze the ability of more people to connect, Hamilton is hosting Your First Million LIVE event in L.A. in April 2024 aimed at building wealth and, as she states it, “creating the next one thousand millionaires instead of another lone billionaire.” She aims for it “to be an annual event where we convene like a town hall.” The lineup includes Sheila Johnson, the first Black woman billionaire in the U.S.; Rich Paul, founder and CEO of Klutch Sports Group; Gary Vaynerchuk, serial entrepreneur and best-selling author; and musical acts such as TLC.

On being a key maker rather than a gatekeeper…

When Hamilton began learning about venture capital, it looked to her like it was set up to benefit a small group of people who would continue to get richer and more powerful while routinely leaving out the same groups, such as women, people of color, and LGBTQ+ people. Hamilton decided she had three options. One was to get upset and just give up. Another was to successfully join the Old Boys Club of Silicon Valley by learning and trying to fit in. The third was to get a seat at the table and bring others along with her, which is what she did. She wanted her wins to benefit not only herself, but to catalyze wins for others as well.

“We’re surrounded by gatekeepers, people who are protecting themselves from us or protecting some entity or institution from the crowd and keeping people at bay for information or resources,” says Hamilton. “And information is the biggest resource we have. You can just imagine someone standing guard at a gate. I have a handful of keys that I’m just passing out on a daily basis, letting you right in. I want to get you as close to the information and the resources as I can. I believe there’s more than enough for everyone.”

On accumulating wealth as a form of activism…

Hamilton says her wealth, success, and opening up access for others is a form of activism, because of ongoing racial wealth inequities. “There’s this huge disparity in the net worth of Black families and Latinx families, for example, versus white families in the United States. So there’s already just this huge gap that is never going to get better if we’re not actively walking towards that,” says Hamilton. “It’s about parity, because I believe everyone is equal as a human. If you believe that with me, then it makes no sense that Black people, for instance, have so much less financially. And we know why we do. We know that these institutions were built on the backs of slaves, and then they were built on the backs of upwardly-mobile Black people and Latinx people…So I don’t admire these big institutions for being so wealthy or having so much, because they built it on my ancestors’ backs.”

That’s why Hamilton is so determined to break through obstacles on the path to accumulating wealth, not only for herself but also for others. “I’ve seen too much to believe anything but that there are some people actively holding us back, even if what they have is so much more than any one person or one institution should have in one lifetime,” she says. “Now, that doesn’t mean that we have to live with that, and it doesn’t mean that it’s an excuse for us not to rise. We have the ability individually and as a group—as women, as people of color, as LGBTQ+ people, as veterans, as immigrants, as non affluent white men, etc.—to make our life whatever we want. The truth of the matter is there are a lot of obstacles, but in parallel the truth also is that we can beat those obstacles.”

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