In today's market, it is crucial for startups and investors to embrace diversity to gain a competitive edge, develop a deeper understanding of a wider set of prospective customers, improve innovation, and foster a more productive work environment. Moreover, data from a variety of sources confirm what we’ve suspected all along- more inclusive teams make better returns for shareholders.
In fact, research by BCG reports that diverse management teams lead to 19% higher revenue, and McKinsey found that companies that identify as more diverse are 35% more likely to outperform competitors. Additionally, diverse companies are 70% more likely to obtain new markets and 87% better at making decisions (HBR, People Management).
I build and invest in inclusive teams, and my mission here at Angel Club is to create more economic mobility and equity through entrepreneurship. Ladi Greenstreet, Head of UK&I at Accenture Ventures, and CEO of Diversity VC, joined us on an episode of Ask Me Anything to discuss corporate innovation, investment, and diversity in the startup ecosystem.
Ladi and I got to know each other a few years ago through VC Unlocked, a fantastic program for emerging fund managers. He operates at the intersection of technology, business, and innovation with a mission to create a Venture Capital industry where unfair bias is no longer a barrier to making or receiving investments as an investor or founder. He specializes in CVC investing in growth-stage companies and guiding large companies through digital transformation to find the best solutions to the world’s most challenging problems.
“The idea is that we know there is systemic bias that exists within venture capital. It's in the way people invest and also the people who sit within [venture capital] that are typically quite homogenous. We go into VCs and help understand where that systemic bias lies.”
Diversity in Entrepreneurship
Startups and investors who prioritize diversity can gain a competitive advantage, improve innovation, and achieve better results. Additionally, diverse teams can challenge each other's assumptions and offer alternative solutions that may not have been considered otherwise. The result is more comprehensive and inclusive decision-making that considers all perspectives, leading to better outcomes.
Ladi has found that “diversity is getting far outperforming returns than the ones who don't have diversity.” Over time, these companies will become much more sustainable" Ladi states. “When you have diversity in the cap table, companies will have a bump in the beginning, reduce CAC, create good press, and cater to a broader audience.”
With a diverse team, startups can also tap into new markets and communities, expand their customer base, and increase their revenue. As Ladi mentions, “...by having a seat at the table as a minority investor, we can advocate to bring in more diversity into the whole process of growing a startup.”
Looking to become an investor? Join in on our next Angel Investing Course to gain valuable insight and explore whether angel investing is right for you.
Corporate Innovation
As technology and business models continue to evolve with startup innovation, large companies are facing sideways disruption. We focus on helping large corporations identify gaps in the market or problems that need solving and build new solutions that create new sources of value at Co-Created.
“I love this because I'm a bit of a disrupter myself,” Ladi says. “I love seeing the disruption happen. A big part of my role became about corporate innovation strategy and taking great ideas from senior corporate leaders to accelerate them and get them to generate new forms of value within the company.”
“We innovate through making investments in startups off our balance sheet and scaling with our clients,” Ladi says. “And so, the thesis there is how can we find new and emerging technology companies, partner with them early, generate revenue through professional services, scale, and sell them to our clients as a channel partner.”
However, the pace at which startups and large corporations operate is very different, and alignment can be challenging. It is crucial to have a partner, like Ladi, to help translate the different cultures. “We help explain the long-term bigger vision to the startup, as well as help mitigate the cross-connect between the corporate sponsor or buyer and the startup.”
In terms of what the startup can do, Ladi says to understand the “client and the role that the startup is playing for clients.”
Raising in Today’s Market
Oftentimes we get so caught up in selling ourselves that we forget the most critical bit of fundraising, which, in addition to knowing what investors are looking for to determine if your startup is a good match, is building a relationship between human beings. This is one of the reasons we launched Intros this year - to take the work out of networking so that you can focus on building deeper relationships while growing your startup or investment portfolio.
To have a successful raise in current conditions, it is crucial to “focus on relationships that you have built over time,” says Ladi. Additionally, it is about “showing that you are good with money, good at using what you have to make something great.”
When founders and startups approach large corporations, the most important element is to “understand the client and the role that the startup is playing for clients. Think of yourself as a strategic innovation partner,” Ladi says. “You're the innovator as a founder– the creative, visionary. Now you have to sit with a corporate sponsor, and then start to help them believe a bigger picture, a bigger world out there, that they can succeed in and help see how your service can fit that.”
Ongoing customer discovery, experimentation, and insights can infuse the whole innovation approach and start to inform the core operating business, not just new products or services. As Ladi mentions, “It's really listening and learning to understand where you add value and using what makes you different to make a difference.”
🤓 Founders looking to pitch to investors, like Ladi, can apply here to participate in our upcoming Pitch Practice on April 28th. Investors who want to get access to deal flow that we get and share with Ladi can sign up here. Not a member yet? Join now and expand your network through curated resources, events, introductions, and mentorship opportunities from globally recognized investors, founders, and experts in the inclusive Angel Club entrepreneurship community.
😇 Angel Club members can sign up here to connect with Ladi and other innovators and investors like him in Intros, our monthly curated introductions.
🎞 A full version of the recording, in addition to investor and media databases, playbooks, templates, and tools can be found in the members-only Angel Club Resource Library.
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