Cisco Levels Venture Capital Playing Field With Aspire Fund For Diverse Founders

Launched in 2020, Cisco’s Aspire Fund is providing direct investment in startups led by women founders and founders of color and is also financing venture funds led by diverse leaders.

Corellium co-founder and CEO Amanda Gorton (Photo via LinkedIn)

An inclusive future for all includes expanding access to venture capital, which has long been lopsided.

At the peak of awareness of growing systemic racial injustice in 2020, Cisco Systems launched a series of 12 measurable social justice actions designed to encourage generational change for the Black community and other underrepresented groups. One of those actions was the Aspire Fund.

A record $330 billion of venture capital was raised in 2021. But women and LatinX founders each received only 2 percent of the total, while Black founders received even less -- only 1.3 percent, according to Cisco Investments, the corporate venture capital arm of the tech giant. This disparity illustrates how far the industry must go in getting capital in the hands of underrepresented innovators, Cisco executives said.

“Our purpose is to power an inclusive future for all. And this purpose sits at the heart of everything we do, including our growth and investment strategy. One important component of a truly inclusive future is investment in diversity,” Cisco CEO Chuck Robbins said during Cisco Investments’ inaugural Magnetic Aspire virtual summit on Thursday.

[Related: Diversity, Equity And Inclusion In The Channel: Where We Are And Where We’re Going]

The Aspire Fund, launched by Cisco Investments, is aimed at providing equal access to capital. The fund began with an initial commitment of $50 million to invest in diverse-led startups and venture funds.

“We knew that companies with diverse management teams have 19 percent higher revenue due to innovation. And we knew that venture investing teams most likely to fund diverse founders also tend to be diverse. Given corporate venture investing and M&A is core to Cisco’s growth strategy, what we also knew to be true is that we had a responsibility to increase diversity in the startup and VC ecosystem,” said Shari Slate, Cisco’s chief inclusion and collaboration officer and senior vice president, Inclusive Future and Strategy, during the summit.

Two years in, the Aspire Fund is providing direct investment in startups led by women founders and founders of color. It’s also financing venture funds led by diverse leaders.

Security startup Corellium is one such company that counts Cisco and the Aspire Fund as one of its investors. The firm was founded in 2017 and was “bootstrapped” for its first four years, Amanda Gorton, Corellium’s co-founder and CEO told CRN.

The company in 2021 pursued a Series A funding round and landed on Paladin Capital Group, a popular investor in the cybersecurity space, as its primary venture capital lead. In searching for supplemental partners, Cisco was suggested. Janey Hoe, vice president of Cisco Investments then reached out to tell Gorton about the Aspire Fund and asked if Corellium would like to participate.

“I thought it was such a fabulous idea. That was really a primary driver for us in deciding to go with Cisco as an investor,” Gorton said. “It’s such a rare opportunity -- I personally am not aware of any other large institutional VCs who have similar funds that are specifically dedicated to promoting diversity -- and particularly women in cybersecurity. It was a great fit.”

The Aspire Fund has given Corellium’s team access to “phenomenal” networking opportunities, in addition to very knowledgeable liaisons and a board observer who is also a woman in IT -- Cisco’s Hoe, Gorton said.

“It’s just been so wonderful having a woman on the board and having a female role model like [Hoe] who I can go to and ask questions,” she said, “It’s such a man’s world [and] it can be really challenging, even when you have male allies in the VC space, so I think that’s something that is a great differentiator for the for the Aspire Fund.

A focus on diversity quite literally pays off. It’s been proven that companies that invest in diversity see better economic performance, competitive advantage and long-term value creation, Cisco’s Slate said.

“The good news is that doing good for people, the planet and society, is also good for business,” she said.