Inclusive Entrepreneurship at SAP
SAP Sponsors 2018 Culture Shifting Weekend in New York (CSWNY)
On November 2–3, 2018, Sallie Jian and Kange Kaneene represented SAP at Culture Shifting Weekend in New York City (CSWNY) alongside SAP’s Deepak Krishnamurthy (Chief Strategy Officer), Judith Williams (Chief Diversity & Inclusion Officer), Vanessa Liu (VP, North America Foundries), Taek Chung (VP, Corporate Strategy), and Danny Allen (VP, Tech Diversity & Inclusion at SAP Labs).
Culture Shifting Weekend is the largest gathering of Black and Latinx investors (GPs & LPs) and the NYC event hosted over 200 impressive individuals in an intentional, invite-only intimate crowd from all over the world. Further, SAP has proudly sponsored CSW since its inception.
Why does inclusive entrepreneurship matter to SAP?
It’s pretty simple: Black and Latinx entrepreneurs are the fastest growing segment of the US economy. Providing access to unbiased capital is an important starting point to drive change in today’s start-up ecosystem and to answer the call of tomorrow’s global economy and multifaceted consumer. And we have a ways to go.
DAY 1 by Kange Kaneene
Day 1 was filled with rich content and perspectives. NYC Comptroller Scott Stringer kicked it off and highlighted that out of NYC’s $400B annual procurement budget, only 5% of the budget is spent with minority owned businesses. By being more intentional and taking steps like diverse procurement of suppliers and support for pension funds that invest in minorities, NYC can help move the needle.
Henri Pierre-Jacques, Co-Founder and Managing Partner of Harlem Capital Partners, announced a white paper recording all minority founders that have raised $5M or more. Additionally, he asserted that most black venture capitalists are General Partners (GPs), revealing that to date the most effective way to become partner at a VC firm as a minority is to start one.
645 Ventures is an example of a relatively new VC firm that was started by two African American GPs, Nnamdi Okike and Aaron Holiday. Aaron moderated a panel with investment legends Fred Wilson and Joanne Wilson (Positively GothamGal). Fred has sentiments similar to Henri, “You can’t be it if you can’t see it,” when it comes to increasing diverse investors and diverse entrepreneurs that receive funding.
Mr. Wilson believes firms want to invest in diversity, but don’t know how. He challenged firms like 645 Ventures to continue to lead the way. Further, Aaron has observed that diverse entrepreneurs feel the need to establish more credible traction (users, revenue, customers) before approaching VCs. However, entrepreneurs from the majority tend to seek capital based on more unsubstantiated forecasts or achievements. As a result, Fred believes diverse entrepreneurs are lower risk because they have higher standards for milestones/traction before approaching investors.
As investors warm to the idea that diverse entrepreneurs are good bets, then Aaron believes we are now in the representation phase. Once true representation is achieved, the next phase will be the performance phase. The community will need to seize massive exits for investors to continue investing in diverse entrepreneurs.
When Aaron asked Joanne and Fred if they believe portfolio company founders will more accurately represent the demographics of the world during their lifetime Joanne quickly said, “I hope so.” Fred candidly said he thinks so for women, but we still have a long way to go for ethnic diversity. Yet he commented that more available capital in early seed could help to accelerate the progress.
The programming ended with an introduction to 16 inspiring Black and Latinx venture capitalists. For example, Dan Gebremedhin an MD and MBA who is a practicing internal medicine physician and venture capitalist investing in companies in the healthcare industry for Flare Capital Founders. Or Maya Horgan Famaodu who founded Ingressive Capital, a fund focused on early stage African tech. She also founded Ingressive, a tech integration company that provides market entry services and tech research for corporates and ventures and operates their Africa strategy over time.
DAY 2 by Sallie Jian
The second and last day of CSWNY drilled in on venture capital deal-making with panels specifically on Fund of Funds, Family Offices, Corporate VCs, Sovereign Wealth Funds, Impact Investors, and concluded with a Fireside Chat on “Finding Profit in Diversity” from SAP’s very own Chief Strategy Officer Deepak Krishnamurthy and Chief Diversity and Inclusion Officer Judith Williams.
Deepak not only leads Corporate Strategy for SAP across all continents, he is also the NY-based executive behind SAP.iO. Judith is the global head honcho of D&I at SAP and recently joins SAP with more than 15 years of experience at the forefront of the culture change movement in technology and entertainment; she led D&I at Dropbox and Google. Both executives are at the center of inclusion initiatives at SAP.
The SAP entrepreneurship ecosystem primarily consists of two branches — Sapphire Ventures (growth stage fund) and SAP.iO (early stage corporate venture). With SAP.iO, we look for complements to Sapphire Ventures and to SAP as a whole. SAP.iO is comprised of the Fund and the Foundry Program, which after a year and half since inception, have invested and accelerated over 100 startups. In particular, the Foundry has launched various program cohorts to reshape inclusive entrepreneurship at SAP:
- SF Women-led Enterprise Tech — Spring 2017
- NYC Women-led Enterprise Tech — Spring 2018
- NYC Women & Diverse-led Enterprise Social Impact — Winter 2019
- Berlin Women & Diverse-led Enterprise Tech — Spring 2019
With these initiatives, SAP.iO has accelerated and invested in a portfolio of startups that is comprised of 40% women founders and founders of color. We find that to uncover the top startups with diverse representation, we ourselves also need unique individuals to run SAP.iO programs and in fact, SAP.iO Foundries have 50% women teams and 80% of the programs have at least one woman in a leadership role. With this, we have a competitive advantage — much greater access to more diverse networks and creative perspectives.
Judith cited a lack of diversity within a company can also spell missed business opportunities with customers in markets that are richly diverse. “SAP is an impressive brand not only for the way its technology helps the world run better and improves people’s lives, but for its commitment to ensuring the global workforce is representative of all types of people,” she said.
Inclusion is not only what our customers demand, it is core to smart business all around.
CSWNY brought together some of the brightest minds in investing, and we feel extremely optimistic that the community generated at the conference will commit to changing the face of investing. We left feeling encouraged about SAP.iO’s inaugural focus on women and people of color and hope SAP.iO will facilitate a wave of inclusion across all of SAP.