ImpactAlpha, March 11 – WhoseYourLandlord, founded in Philadelphia by Ofo Ezeugwu to empower and inform renters, is among the first 25 companies backed by Backstage Capital’s new accelerator program.
The venture capital firm for founders who identify as a woman, person of color, and/or LGBTQ will invest $100,000, and provide mentorship, investor introductions and financial guidance to each of the Detroit, Philadelphia, Los Angeles and London-based companies, in exchange for a 5% stake.
There’s an untapped opportunity to “invest in folks in communities who understand the needs,” WhoseYourLandlord’s Ezeugwu told ImpactAlpha. The Temple graduate had previously raised about $400,000 in seed funding from Corlyst Group, Quake Capital and Ben Franklyn Technology Partners, as well as another $50,000 in equity crowd funding. To improve poor landlord-tenant relationships, which disproportionally affect people of color, the firm has collected up and shared landlord reviews in 240 cities across the U.S. – 15,000 in Philadelphia and New York alone. The firm is working with Philadelphia developer Shift Capital to role out the software across Philly’s Kensington neighborhood.
The Backstage accelerator, he says “helps fill the friends and family funding gap for folks overlooked by other investors.”
Among the six startups joining WhoseYourLandlord in the Philadelphia cohort are Hale, which makes a connected vaporizer pen that helps users quit nicotine, and Dressmate, a peer-to-peer clothing rental marketplace for college students. In Detroit, Backstage selected seven companies, including Alerje, which has developed a medtech product that provides alerts and avoidance solutions to those impacted by food allergies, and CrowdFreak, a platform that provides up-and-coming artists with performance opportunities around the world.
The Backstage accelerator backed a half-dozen companies in Los Angeles, including Lacquerbar, which provides a feminist focused nail salon experience, and Lorals, which aims to close the “pleasure gap” with its ultra-thin, natural latex wearables for oral sex. In London, the accelerator will work with five startups, including Afrocenchix, which makes natural, organic and vegan products for Afro and curly hair, and gal-dem, a media company for and by women and non-binary people of color with a popular online and offline magazine.
Returns on inclusion
Many investors view venture capital’s dismal record of investing in women and founders of color, or entrepreneurs outside the major startup hubs of Silicon Valley, Boston and New York City as a pipeline problem. Backstage Capital’s Arlan Hamilton views it as an investment opportunity.
Of Backstage Capital’s first 100 investments, 80% were in founders of color, 68% were in women founders, 13% in LGBTQ founders and a full 52% in women of color. “If the problem is that people are pattern-matching, that means there should be more people like me writing checks,” Hamilton told ImpactAlpha in an interview last year. Backstage aims to raise $36 million for its second fund to invest in Black email founders.
The 100 companies backed by Backstage prior to the accelerator have gone on to raise $50 million in follow-on capital (as of December), according to FastCompany. Last month, Haute Hijab, the New York maker of ethically-sourced headscarves, raised $2.3 million led by Boston-based social investment firm Cue Ball.