The Backbone Angels are on the beat and looking to amp it up in 2022

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Although 2021 has been a boom year for venture capital in the United States and Canada, female founders have seen their share of the venture capital pie dwindle. For Atlee Clark of Ottawa-based Backbone Angels, it just shows there’s a lot of work to be done.

Last year, according to US firm Pitchbook, female founders secured 2% of the US$330 billion in venture capital deployed, the smallest share since 2016. This is the second year in a row that the percentage of women in the Venture capital funding has declined, even as the overall dollar value of funding to female founders has increased. It’s likely a similar story in Canada, which saw a record $14.2 billion in venture capital deployed across 751 investments, more than double the record set in 2019.

Recognizing the problem, particularly for seed investments, Clark and nine of his current and past Shopify colleagues banded together last March to secure much-needed capital for underrepresented founders.

“For Backbone, we’re really proud of our year,” Clark told OBJ, adding that she and her fellow angel investors have been inundated with submissions from women and BIPOC entrepreneurs.

“It’s really amazing how many ideas (there are) and people who want to put it all on the line,” Clark said. “It took us weeks to dig in the first wave of responses, and then we got into our groove.”

This pace has resulted in Backbone Angels deploying over US$2.3 million across 42 companies, the majority in Canada and a few in the US and India. Seventy-two percent of capital deployed was in new founders and 56% in women of color.

“Of all the companies we’ve invested in over the past 12 months, the founders all have different styles, come from really different backgrounds…but they’re all super passionate about the problem they’re solving and super focused on solving it. As long as you see this, it has no gender,” Clark said.

Instead of having an investment fund, Backbone Angels deploy personal money. They prefer to invest alongside a colleague, but sometimes go it alone. Trade sizes typically range from $10,000 to $50,000.

Although each of the Backbone women may seek different stages of business development, they have a philosophy in common. “When we look at opportunities, (we ask) can we be helpful? Yes. Do we think that person is someone who can bring their idea to life and the world? Yes. Alright, here’s some money, good luck,” Clark said.

Although it may seem a bit laissez-faire, Clark and his fellow investors often act as advisers and are never more than a phone call away. “I have one founder that I meet with every month, there’s another founder that she just calls when she needs something, and there’s another founder that I get updates on,” Clark said.

Going forward, Clark said Backbone Angels hopes to further diversify its portfolio and potentially do follow-on rounds on its own or with other investors. Clark said the VC ecosystem has “embraced” the Backbone Angels and been very supportive.

Of course, while angel investing is a long game, Clark said they’re still chasing that elusive return, although that wasn’t their original goal. “Really, the spirit of Backbone is to get capital for female founders…and we know some of them might have returns and some might not,” she said. “We don’t invest for no return, but we do understand the reality of angel investing.”

When it comes to an exit strategy for their investments, Clark and his colleagues are inspired by their time at Shopify.

“We are less focused on releasing and more on building. The 10 of us sat inside Shopify at the start and were able to not just watch, but participate in building this business,” explained Clark, Director of Shop Operations at Shopify. “We wanted to take that experience and that insight and bring it to the female founders and help them achieve the success that Shopify has had and also maybe avoid some of the mistakes that we all made in the beginning.”

This year will see a streamlined application process for Backbone Angels and faster responses for anxious applicants.

“We were surprised (last year) by the volume,” Clark said. “We would love to give everyone who sends us a deck or business plan feedback, but then we realized very quickly that for the 10 of us it was a heavy load.”

Backbone Angels is accepting applications from March 8, 2022 through April 19, 2022 and aims to respond to applicants within two weeks.

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