'We don’t want to just write cheques': Shopify executives launch investing collective Backbone Angels
Co-founded by 10 female Shopify leaders, the group will focus on investments in Black, Indigenous, and Women of Colour-led companies.
Earlier today (March 8), a slate of current and former Shopify executives launched an angel investing collective that will invest in women and non-binary founders with a focus on investments in Black, Indigenous, and Women of Colour-led companies.
Operating under the name Backbone Angels, the group is made up of ten female angel investors, all of whom have years of experience scaling one of the biggest technology companies in the world and Canada’s most valuable publicly-traded company.
The group had been acting as an informal network—supporting each other, sharing opportunities, and soliciting advice to help the entrepreneurs they were personally backing succeed. “And then we asked, ‘How much of an impact could we have if we got together?’” Konval Matin, Shopify’s Director, Merchant Stories told me this morning on a Zoom call with me and Lynsey Thornton, Managing Director, US West at Shopify. Both Matin and Thornton are founding partners of Backbone Angels. Here’s what I learned from them.
The unique selling point
“What we're really excited about in particular,” Thornton told me, “is the differentiating factor of our group, which is that we are a collective.” Their key value proposition is the access to expertise founders will get if they secure funding from even just one of Backbone’s members.
“When somebody gets investment from our group, even if they only get investment from two of the angels, for example, they'll get the capacity of the entire collective,” Thornton notes, “and that encompasses people from talent, marketing, design, and data—and we think that's going to be really valuable for founders.”
Whose expertise will founders be tapping into? Backbone’s bench is deep. The collective’s members include Matin and Thornton; Shopify Vice President of Strategic Initiatives, Alexandra Clark; Brittany Forsyth, Chief Talent Officer; Erin Zipes, Vice President, Assistant General Counsel; Anna Lambert, Director of Product Acceleration; Solmaz Shahalizadeh, Vice President of Commerce Intelligence; Atlee Clark, Director of Operations for Shop, Shopify’s shopping assistant app; Marcie Murray, Director of Operations for Ecosystem; and former Shopify employee Arati Sharma, co-founder of Ghlee, a ghee-based skincare company based in Toronto, Canada.
I asked if the partners had to commit a specific amount of capital to join the group and if they’d be discussing investments together. Thornton said all investment decisions are being made individually for now. “The main thing is that we've all committed time and money to this adventure,” she said. “And to be quite honest, we want to see how big it can go. And so we don't want to cap it and we don't want to set a finite amount [for investments].”
It turns out the group is already on the receiving end of calls from other investors looking to get in on the action. “I think if this goes well, this will end up being 10 times bigger than what we're announcing today,” Thornton continues. “And it'll include a larger network and hopefully a long list of successful founders.”
But first, they just want to test out their model. Thornton told me that what's important to them right now is making things official and “to start having people understand what is a collective, what is different about us, what is the unique value that we bring, and then prove out that model. In the future, if it grows into something bigger, we will all be delighted.”
United to elevate each other
Backbone’s founding partners believe that access to resources for entrepreneurs is currently not distributed equally, and the data backs up this belief. In fact, to mark this launch, the Backbone Twitter account tweeted some alarming statistics:
“From the beginning of 2020 through mid-December, the funding to women-founded startups globally dropped by 27%.”
“Of the $424.7B in total tech venture funding raised since 2009: .32% of the funds went to Latinx women-led startups; .0006% funds went to Black women-led startups; Despite lower fail rates.”
“We need a collective effort to change where money goes, which founders are backed, and by whom.”
Beyond the numbers, why is a focus on women and non-binary founders important for the Backbone founders? To start, they’re all already working on social equity issues within Shopify, explains Thornton. “We have had that impact with the company, and we’ve seen some of that impact through the Shopify merchant base,” she says.
“I would say that I've just seen the benefits firsthand of what it's like when we empower women,” adds Matin. “And it's something that we obviously see quite a bit at Shopify. You know, we see merchants that have come through and the difference that it's made in their lives and for us. It just felt like a no-brainer, and it was something that united us as a group as well.”
“We would like to be the change we want to see in the world,” Thornton added.
Support from HQ
While Shopify is not formally involved in this new venture, the company’s executive team has been celebrating it online.
Shopify is known to back entrepreneurship within the company. They’ve sponsored people to start their own businesses through bursaries so employees can understand entrepreneurship. “At a lot of companies, running anything on your own outside of your nine-to-five would be considered something that you shouldn't do,” comments Thornton. “That is very much not the case at Shopify.”
Founder stories wanted
If you’re an entrepreneur looking to approach Backbone for funding, you should get your stories ready. The partners want to learn who people are, what’s important to them and why they’re starting a new endeavour. “We think that there's so much more to a person than just a website and where they're located,” according to Matin. “For us, we're context-heavy, and we want to understand what [applicants] want to share with us.”
The fifth section of the application form reads, “Please attach any helpful documentation about your company and narrative.” Again, why such a big focus on history and trajectory? Thornton lays out the group’s thinking like this: “A valuable lesson we've all learned at Shopify is the value of the person. You know, we're really investing in founders here. And sometimes, as we see with businesses on Shopify, founders go through multiple rounds. They have multiple businesses—some fail, some succeed over time, but it is not such a linear process. Learning more about the person that we're hoping to invest in is absolutely key.”
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