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Roundup: Magnetic Aspire Virtual Summit | Cisco Investments

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Roundup: Magnetic Aspire Virtual Summit

Cisco Investments Team

Two years ago, Cisco and Cisco Investments launched the Aspire Fund—an initial $50 million fund focused on financing and scaling diverse-led startups and VC funds.  

To mark the two-year milestone of the launch and to celebrate its impact, we recently held the inaugural Magnetic Aspire Summit. The virtual event showcased the incredible innovation the fund has propelled through the visionary leaders who have participated in it. 

Here are some highlights.

Holding ourselves accountable

In his opening message, Cisco CEO Chuck Robbins placed the Aspire Fund in the context of Cisco’s purpose to power an inclusive future for all. This purpose sits at the heart of everything Cisco does, including its growth and investment strategy.

“One important component of a truly inclusive future is investment in diversity,” Chuck said. “This has been a focus area for us for many years. But the events of 2020 highlighted the racial injustice and inequity in our society even further and compelled us to do more and hold ourselves accountable.” 

The Aspire Fund was born out of Cisco's larger commitment to social justice. The vision behind it is not only to provide equal access to capital and opportunities, but also to accelerate their growth with Cisco support in order to create a positive change in the venture ecosystem.

Accelerating innovation through purpose-driven investments

Shari Slate, Cisco’s former chief inclusion and collaboration officer, highlighted the importance for companies to serve a higher purpose.  

“Companies large and small are being asked to help solve the world's biggest social, economic, and environmental challenges,” she said. “And the good news is that what's doing good for people, planet, and society is also good for business.”

Citing a recent Deloitte report titled “The Purpose Premium,” Shari said purpose is directly tied to a company's business strategy, as well as its economic performance, competitive advantage, and long-term value creation.

Shari also shared revealing findings connecting diversity to the bottom line, including

  • Companies with diverse founders outperform others by 30% when they go public or are acquired, and companies with diverse management teams have a 19% higher revenue due to innovation.

  • Shared ethnicity in companies decreases the success rate of IPOs and acquisitions by 32%. 

  • Companies with diverse founders outperform others by 30% when they go public or are acquired. 

  • Companies with diverse management teams have a 19% higher revenue due to innovation.

Unleashing the potential of Latino entrepreneurs

How will we achieve growth in the 21st century? According to Sol Trujillo, partner and CEO at L'ATTITUDE Ventures, Hispanic/Latino tech leaders and entrepreneurs will have a huge role to play.

In a conversation with Derek Idemoto, SVP of Corporate Development and Cisco Investments, Sol explained how increasing the flow of capital to Latino/Latina entrepreneurs can translate to GDP growth in the U.S. The L'ATTITUDE venture fund (which Cisco has invested in) is designed to do just that.

When it comes to business, the Latino cohort is both innovative and prolific. According to LDC's 2021 U.S. Latino GDP report, today’s Hispanic/Latino population has created nearly 80% of all net new business in the country and created about 50% of all employer-founded businesses.

“We're just trying to unclog the system,” said Sol, co-founder of L'ATTITUDE and L'ATTITUDE Ventures and former CEO of several global telecom giant. “It's based on business cases. It's not philanthropy. It's not anything other than good business.”

Women transforming cybersecurity

Standing out from the crowd is hard enough for any entrepreneur in the cybersecurity industry, which sees 150 new startups a year. But female founders face additional hurdles.

Shailaja Shankar, SVP and GM of Cisco’s Security Group, and Amanda Gorton, CEO and co-founder of Corellium, shared insights into the challenges and opportunities they encountered as they navigated this male-dominated space.

Among the topics they tackled: How do you handle the pressure to stand out? How do you improve DEI (diversity, equity, and inclusion) in cybersecurity? How do you create and maintain a strong pipeline for diverse talent?

“We need continuous innovation,” Shailaja said, adding that innovation can happen in large companies, too.

A case in point was Cisco making its security products available to several infrastructure players in Ukraine—rapidly and for free—when that country came under attack from Russia.

Amanda said a key to improving the DEI quotient is to bake it into the cultural DNA at the startup level as a best practice.

“Candidates ask about this kind of stuff,” she said. “They're expecting it. So, if you want to attract top talent, it's table stakes.”

Shailaja and Amanda spoke of the importance of putting women in decision-making roles and of events that raise the profile of female founders.

“All of this I think helps attract talent to the industry and show them that it is a welcoming environment, an environment where they belong, an environment where they can succeed,” Amanda said.

Moderating the panel was Prasad Parthasarathi, Senior Director of Corporate Development and Cisco Investments.

Empowering BIPOC founders

When Lo Toney was on the investing team at Google Ventures (now GV), he learned of a virtually untapped opportunity: investing as a limited partner (LP) in early-stage venture capital funds led by Black general partners. 

A lightbulb went off: What if he built a firm based on this model? And so Plexo Capital was born. Lo is the founding GP of the firm, which invests in emerging seed-stage VCs led by diverse teams. Cisco Investments is among its investors.

Lo’s contributions toward empowering BIPOC founders didn’t end there. He went on to launch an open source education platform named GPx which is designed to help emerging fund managers 1) form a fund, 2) raise a fund, and 3) manage a fund.

In a fireside chat with Cisco’s Kay Min, Senior Director of Corporate Development and Cisco Investments, Lo said the GPx content is free to anyone who signs up for it.

“That was really important for me, because I feel like the ability to have access to that information is yet another barrier for women and people of color,” he said.

Lo was recently recognized by the National Venture Capital Association for his impact in improving DEI in the VC and technology startup world.

Diversity is smart business

Investing in diversity is not merely some “nice-to-have” corporate strategy—it’s smart business. Just ask Theresia Gouw, founding partner of Acrew Capital, and Jessica Lin, co-founder and general partner at Work-Bench.

In a panel discussion with Janey Hoe, VP of Corporate Development and Cisco Investments, each tells how diversity turbocharges the venture firms they launched.

Acrew Capital is a women-led firm with about 50% women or underrepresented minorities on the investing team, and with founding partners spanning three generations. It focuses on security, fintech, data platforms, and community-activated.

“Diversity is an accelerant to our venture capital business,” Theresia said. “And that helps us both in networks and deal sourcing.”

She cited a McKinsey study that shows gender-diverse boards outperform on an ROE (return on equity) basis by 25%. And if the board and management team is both gender and ethnically diverse, the outperformance is 35%. 

Yet almost two-thirds of VC firms “still don't have a single female investment check writer,” she said.

Work-Bench is an early-stage enterprise software VC firm that invests in areas like data, AI and ML, security, infrastructure and developer tools, and the future of work, with a strong emphasis on selling to large enterprise customers.

Jessica said that, despite broad awareness that women-founded startups outperform those founded by men, the industry is slow to back women founders. To offset that trend, her firm compiles a database of women founders in the enterprise software space, periodically reaching out to new ones.

“We’ve realized we can’t sit back and hope that women founders find us,” she says. “So, we methodically identify and reach out to women proactively. And that's something that we hope more and more funds do.”

Cisco’s Derek Idemoto rounded out the summit by laying out how Cisco and its partners (portfolio companies, fellow investors, customers) will continue to pave the way for creating more opportunities for underrepresented technology leaders and together build an inclusive future.