WOC Entrepreneurs Obtain Funding from Backbone Angels

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Arati Sharma never expected to become an angel investor. The child of Indian immigrants, she grew up in the middle class in Canada, earned a degree in political science from McMaster University and began her career as a lobbyist in Ottawa.

“I wanted to be CJ Cregg from The west wing,” she says fast business.

However, she found her niche helping with social media strategy and developed expertise in branding and project management. She brought those skills to the tech world and landed a job at Shopify in her early days. Sharma played a key role in setting up product marketing.

When Shopify shares went public, Sharma took advantage of a financial windfall and started investing. But she began to realize that most of her and her husband’s investments were going to white men and a few white women.

“My husband is also South Asian, and all we do is talk about diversity and women in tech, but this portfolio wasn’t representative of what we believed in,” Sharma says. She decided she was going to spend a year investing only in women. But then, halfway through, she realized that her portfolio was mostly made up of white women and that she should be even more focused on her diversity goal.

Sharma and nine other Shopify executives — who had bonded over often being the only women in the room — decided to form Backbone Angels in 2021. The group’s mission is to fund women and non-binary entrepreneurs, putting l focus on color founders.

In recent years, venture capital money has flowed from investors: last year, global investments totaled $643 billion, a 92% increase from 2020. Yet women entrepreneurs, especially women entrepreneurs of color don’t see their share of the money. In 2019, women received 2.8% of funding, an all-time high that fell to 2.3% in 2020. That year, black women received 0.64% of venture capital funding, according to Project Diane.

Backbone Angels, in its first year, invested $2.3 million in 42 companies, and 56% of its investments were in businesses led by women of color.

“We constantly fight prejudice as women of color,” Sharma says. “We are often forgotten.” She points out that seasoned venture capitalists often assume she hasn’t cut checks yet, when her portfolio includes 50 companies.

Sharma cites a noted TED Talk by Dana Kanze, assistant professor at London Business School, which explains how female founders are treated differently from their male counterparts early on. When women enter a room to throw, they are immediately put on the defensive. Investors tend to ask questions about how they will retain customers, while men ask questions about how they will grow their customer base.

Sharma has an inherent understanding of what it means to be a Founder. Her passion for products also led her to join Ghlee, a beauty brand created by her brother, which sells ghee-based skincare and lip balm. However, even though Sharma is developing Ghlee, she also wants to invest in other South Asian beauty products. “We don’t compete,” she says, “and when we’re a category, more people will take us seriously, especially investors.”

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