Since the launch of Backstage Capital venture capitalist in 2015, Arlan Hamilton invested millions in more than 195 companies led by underrepresented founders, from a duo underwriting auto insurance to a team rethinking how we learn virtually. Despite the breadth of the business, Hamilton says he always gets two questions from his portfolio companies:
“Can you help us raise money? And, “Can you help us with the hiring?”
While Hamilton’s fund is a response to the former, his latest bet – built by Hamilton herself – is a startup that exploits the latter. Hall is a job marketplace that connects startups with operations people looking for part-time work. It seeks to combat some of the biggest tensions in building early-stage startups, like deciding when it’s time to hire your first head of talent or figuring out what to hire or what to build in-house when it comes to staffing. It is being released with an explicit focus on operations functions.
“There are so many places you can go if you want to learn to code or if you want to get a job on the more technical side of things,” says Hamilton. “But where do you go now if you want to be somebody’s right-hand man, the COO, etc. …it’s kind of an afterthought for most [companies].”
Conceptually, Runner is not the opposite. Upwork and Fiverr have built solid businesses at the top of the freelance economy. What is different about the startup, however, is who it targets – tech operations people – and how it employs them. Every “runner” or part-time professional who wants to get a new job is employed by the company under the W-2 classification. About 200 runners are on the platform today, including those with experience in corporate roles or those who were previously entrepreneurs looking for another stream of income.
Many current company executives have joined as runners. For example, head of customer success, Melanie Jones, joined the platform after spending time as a product manager at a dental network. Within a month, she was hired as an executive, alongside several other runners who became decision makers at the company. Separately, Boeing executive Diana Moore joined as COO just four months ago.
For Hamilton, Runner is a return to an idea she was working on before she even ventured out. Prior to Backstage, Hamilton was a production coordinator and tour manager for musicians (she continues to spice up musical references in her work as an investor). While in this role, she often worked with joggers or individuals with local experience who could be a right-hand helper to get things done while on the road. When she was building Backstage, she started using runners in her own life, hiring people for day-to-day help while meeting founders across the country.
After the investor saw the synergies between this role in the production world and technology’s love of flexibility, she created Runner, logo and all.
“We were building Backstage, we didn’t have the resources, because COVID hadn’t happened yet, people were really kind of confused by the idea,” she said. “So it was just one of those whiteboard ideas.” Now, nearly two years into a pandemic still ongoing, the market is ready.
The company’s business model is a 25% cut of a runner’s hourly rate. In addition, if a runner is recruited by a client to join them full-time, the client must pay a recruitment fee of 10% of the runner’s first year salary.
Unlike Backstage, which wants to change how venture capital is distributed and to whom, Runner isn’t building it under the guise of helping companies recruit underrepresented talent — a choice Hamilton made, interestingly, because she didn’t. wanted to “classify” the company.
“It would have been very easy for us to just classify ourselves as a DEI recruiting company, but we didn’t want to be responsible for that – it should be everyone’s responsibility,” she said. That said, today all Runner executives come from historically neglected backgrounds.
Before going to the waitlist model to better handle demand, Runner secured around 120 pilot customers at an execution fee of $500,000. Your app is scheduled to be released on March 15, 2022.
As for funding, Hamilton initially started the company and within the first 100 days, raised an angelic round of $500,000. More recently, Runner raised a $1.5 million pre-seed round on a SAFE note in an undisclosed valuation.
Supporters in this round include Precursor, Lunar Startups, Kapor Capital’s Freada Klein, 360 Venture Collective and Gaingels. Backstage Capital’s crowd syndicate, Backstage Flex Fund II and Backstage Opportunity Fund I, also invested in the startup.
It’s rare to see investors pour money from their own fund into a company they started, but as Hamilton notes, it’s not unheard of when you consider Guy Oseary’s Sound Ventures investing in his company, Bright, or David Sacks’ Craft Ventures. investing in your audio company. Still, it can create a conflict of interest if company decision makers feel pressure to put money into a GP’s company, because they are, well, the GP.
Hamilton was part of the investment committee that decided to put money into Runner, but also gave each person the authority to make autonomous decisions, she says. She also added that the eight-page memo – which addresses challenges, opportunities and gaps – was written by Backstage partner Brittany Davis and associate Kelly Lei, with no changes to her. Runner crew provided the field deck.
“It is my fiduciary duty at the company to bring in returns, and it is my duty as CEO of Runner to bring in the best investment partners possible. I did both,” adds Hamilton on Twitter DM. Another balance in the mix is that any company in the Backstage portfolio that uses Runner doesn’t have to pay the 25% service fee, or the amount that goes to the company’s revenues and operations.
“Our goal is to have 1,000 or more students by the end of the year, earning an average of $40,000,” said Hamilton. “[Then] We are a half billion dollar company.”