Arlan Hamilton wants to redirect how startups rent – TechCrunch


Since the launch of the Venture capital firm Backstage Capital, Arlan Hamilton invested millions in 2015 in more than 195 companies led by underrepresented founders, from a duo taking out auto insurance to a team rethinking how we learn virtually. Despite the breadth of the company, Hamilton says her portfolio companies consistently ask her two questions:

“Can you help us raise money? And: “Can you help us with hiring?”

While Hamilton’s fund is an answer to the former, her latest bet – built by Hamilton himself – is a startup exploring the latter. Runner is a job market that connects startups with operations people looking for part-time work. It aims to combat some of the biggest tensions in early stage startup, like deciding when it’s time to hire your first talent, or figuring out what to outsource or build in-house when it comes for staff. † It is being launched with an explicit focus on operational roles.

“There are so many places you can go if you want to learn to code or if you want to get a job, like in the more technical side of things,” Hamilton says. “But where do you go if you want to be someone’s right-hand man, the COO, etc… it’s kind of an afterthought for most [companies]†

Conceptually, Runner is not contrarian. Upwork and Fiverr have built solid businesses on top of the freelancer economy. What’s different about the startup, though, is who it’s targeting—operators in tech—and how it employs them. Any “runner” or part-time professional seeking a new gig is employed by the company under a W-2 rating. There are about 200 runners on the platform today, including those with experience in corporate positions or those who were formerly entrepreneurs who want a different income stream.

Many current executives at the company first joined as runners. For example, Melanie Jones, head of customer success, joined the platform after spending time as a product manager at a dental network. Within a month, she was hired as an executive along with a number of other runners who became decision makers at the company. Separately, Boeing exec Diana Moore joined as COO just four months ago.

Classifying runners as employees rather than contractors can help individuals gain basic protection and greater job stability. Bluecrew, graduated from Y Combinator, launched in the same way to provide on-demand workers, but hire them as workers with benefits, albeit in roles such as bartending, event staffing, security, data entry or customer support.

For Hamilton, Runner is a return to an idea she worked on before even starting a venture. Before Backstage, Hamilton was a production coordinator and tour manager for musicians (she continues to pepper music references in her work as an investor). In that role, she often worked with runners, or people with local expertise who could be a right hand to make things happen while on the go. While building Backstage, she started using runners in her own life, hiring people for one-day help while meeting founders across the country.

Seeing synergies between this role in the manufacturing world and tech’s love of flexibility, the investor brewed Runner, with a logo and all.

“We were building Backstage, we had no resources, because COVID hadn’t happened yet, people were really a little confused by the idea of ​​it,” she said. “So it was just one of those whiteboard ideas.” Now, almost two years after an ongoing pandemic, the market is ready.

The company’s business model is 25% off a runner’s hourly rate. Additionally, if a runner is recruited by a client to join them full-time, the client must pay a hiring fee of 10% of the runner’s first annual salary.

Unlike Backstage, which wants the way venture capital is distributed and to whom, Runner doesn’t build under the guise of helping companies recruit underrepresented talent — a choice Hamilton made, interestingly enough, because she owns the company.

“It would have been really easy for us to just categorize 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, all executives at Runner today come from historically overlooked backgrounds.

Before going to the waitlist model to better handle demand, Runner managed to get about 120 pilot customers with a run rate of $500,000. The app will be launched on March 15, 2022.

As for funding, Hamilton initially started the company and raised a $500,000 angel round within the first 100 days. Most recently, Runner raised a $1.5 million pre-seed round on a SAFE note at an undisclosed valuation.

Supporters in that round include Precursor, Lunar Startups, Freada Klein of Kapor Capital, 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 putting their own fund’s money into a company they’ve started, but, as Hamilton points out, it’s not unheard of when you consider Guy Oseary’s Sound Ventures investing in his company, Bright of David Sacks. Craft Ventures invests in its audio business. Still, it can create a conflict of interest if company decision-makers feel the pressure to put money into a GP’s business 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 power to make autonomous decisions, she says. She also added that the eight-page deal memo — which addresses challenges, opportunities and gaps — was written by Backstage partner Brittany Davis and associate Kelly Lei, with no changes from her. The Runner team provided the pitch deck.

“It is my fiduciary duty to the company to drive returns, and it is my duty as CEO of Runner to bring in the best investment partners possible. I’ve done both,” added Hamilton via Twitter DM. Another balance in the mix is ​​that every Backstage portfolio company that uses Runner doesn’t have to pay the 25% service charge, or the amount that goes into the company’s revenues and operations.

“Our goal is to have 1,000 or more students earning an average of $40,000 by the end of the year,” said Hamilton. †[Then] we are a half-billion dollar company.”

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