Featured Article

Arlan Hamilton wants to reroute how startups hire

A look at Runner, the investor’s newest bet (that she’s building herself)


Vincit runs a CEO of the Day program once a month
Image Credits: Blake Little (opens in a new window) / Getty Images

Since launching the venture firm Backstage Capital in 2015, Arlan Hamilton has invested millions in more than 195 companies led by underrepresented founders, from a duo taking on auto insurance to a team rethinking how we virtually learn. Despite the breadth in the business, Hamilton says she is consistently asked two questions by her portfolio companies:

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

While Hamilton’s fund is a response to the former, her latest bet — built by Hamilton herself — is a startup that explores the latter. Runner is a labor marketplace that connects startups with operations people looking for part-time work. It seeks to combat some of the largest tensions in early-stage startup building, such as deciding when it’s time to hire your first head of talent, or figuring out what to contract out, or what to build in-house when it comes to staffing. It’s launching with an explicit focus on operations roles.

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

Conceptually, Runner isn’t contrarian. Upwork and Fiverr have built solid businesses atop the freelancer economy. What’s different about the startup, though, is in who it targets — operations folks in tech — and how it employs them. Every “runner” or part-time professional who is looking to get a new gig is employed by the company under a W-2 classification. Around 200 runners are on the platform today, including those with experience in corporate roles or those who were previously entrepreneurs who want another stream of income.

Many current executives at the company first 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 a number of other runners-turned-decision-makers at the company. Separately, Boeing exec Dianna Moore joined as a COO just four months ago.

By classifying runners as employees instead of contractors, individuals are able to get basic protections and more job stability. Bluecrew, a Y Combinator graduate, similarly launched to provide on-demand workers, but hired them as employees with benefits, albeit in roles such as bartending, event staff, security, data entry or customer support.

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

After the investor saw synergies between this role within the production world and tech’s love for flexibility, she brewed up Runner, with a logo and everything.

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

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

Unlike Backstage, which wants to upend the way venture capital is distributed and to whom, Runner isn’t building under the guise of helping companies recruit underrepresented talent — a choice Hamilton made, interestingly, because she didn’t want to “pigeonhole” the company.

“It would have been really easy for us to just categorize ourselves as a DEI recruitment company, but we didn’t want to be responsible for that — it should be everyone’s responsibility,” she said. That said, today, all executives at Runner come from historically overlooked backgrounds.

Before it went to the waitlist model to better deal with demand, Runner secured around 120 pilot customers at a $500,000 run rate. Its app is set to launch on March 15, 2022.

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

Backers 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 pour their own fund’s money 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 his audio company. Still, it can create a conflict of interest if decision-makers at the firm 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 authority to make autonomous decisions, she says. She also added that the eight-page deal memo — which gets into challenges, opportunity and gaps — was written by Backstage partner Brittany Davis, and associate Kelly Lei, without any alterations from her. The Runner team provided the pitch deck.

“It’s my fiduciary duty at the firm to bring back returns, and it’s my duty as a CEO of Runner to bring in the best investment partners possible. I did both,” Hamilton adds over Twitter DM. Another balance in the mix is that any Backstage portfolio company that uses Runner doesn’t have to pay the 25% service fee, or the amount that goes to the company’s revenue and operations.

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

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo