Last night we had the opportunity to spend some time at the new SAP offices in NYC to celebrate the launch of the first SAP.iO Foundry Cohort in New York focusing on women-led enterprise technology startups. As many who read this blog know we announced a while back our involvement in Project #MovingForward and remain committed supporters of the growth and change in our industry as it relates to diversity and inclusion. For those that do not know about the SAP.iO Foundries, they are a global network of top-tier startup programs that help teams build innovative software and deliver high value for customers. The night was amazing with SAP CMO Alicia Tillman kicking off the evening with her thoughts on the foundations of the SAP brand as well as her perspective on shaping the message in today’s environment. She also touched on some of the more unique and important work that SAP is doing which was fun to hear about. After her remarks our panel focused on the NYC tech ecosystem, supporting female founders, thoughts on the B2B ecosystem, and how the Foundry cohort companies can be supported in their efforts. We had a great host in SAP Chief Strategy Officer Deepak Krishnamurthy. Below were a couple of interesting trends and themes coming out of the SAP.iO Foundry event last night.
1. NYC Is Overtaking SF In VC Dollars. According to PwC’s MoneyTree report as of Q3 2017, NYC actually overtook SF when it came to VC dollars. This happened that quarter for the first time in a long time. VCs invested roughly $4.2B in NYC companies over the third quarter of 2017, compared to roughly $4.1B in funding for companies in San Francisco and the North Bay Area. Beth Ferreira, Managing Director at FirstMark Capital, mentioned this and the fact that SF VCs are now competing with NYC VCs on a significant scale in each and every deal she spends time on. The NYC ecosystem is supported by more dollars flowing into this ecosystem, there are many recent successful IPOs, university tech is on the rise, and the talent growth is setting a strong foundation. Gravity continues to pull founders and investors towards NYC.
2. Diversity Remains A Huge Competitive Advantage. One of the more obvious pieces coming out of the SAP.iO Foundry event was that group spent a bunch of time on team diversity. Heidi Messer, Chairman & Co-Founder of Collective [i], talked about how this can really be a huge competitive advantage for your business. If you are already at your Series A and haven’t thought about building a diverse team, you are probably in a bad place. Being proactive, really putting in the time and effort on the recruiting front, sourcing and searching in non-obvious areas, and focusing on all levels of your organization can truly create a more diverse culture and business. This has serious effect when it comes to marketing your company but also the actual returns of the business. Anecdotally, the group felt that NYC seems to have less problems with this than SF.
3. How Can Accelerators & CVCs Be Helpful? The panel spent some time talking about the overall role of corporate venture capital and accelerators in the NYC ecosystem with the group mixed on the effectiveness of CVCs (corporate venture capital) but everyone aligned on how important the accelerator component was to growth. On the CVC front, if the corporate focuses on “how can we help, promote, and leverage this company outside of the traditional BD deal and investment” it tends to work out well. If the view of the CVC is “we just provide capital and maybe a BD deal” this was a tricky approach and will likely not work in today’s environment. On the Accelerator front, these groups – including SAP.iO – are incredibly important. They can provide access, advice, support and probably most important the confidence to raise the right round. As groups like SAP.iO come on to the market with unique models (no equity) it will be interesting to see how this space evolves and they disrupt some of the more traditional players.
4. One Sentence Words Of Advice. The SAP.iO Foundry event ended with a narrow question from Deepak focused on giving the cohort companies and their founders one piece of advice. Beth told founders to “run fast and build quickly” as there likely is always someone else trying to do what you are doing. Heidi told founders to “focus on sales and building the revenue line of your company” which was music to our Acceleration Team’s ears. Mike mentioned that founders will go through difficult times and it was important to always “have ice water in your veins” to manage through the ups and downs of startup life. Vanessa Liu, VP of the SAP.iO Foundry, told founders to “separate the non-essential work from the essential work” as there is a lot in an early stage environment that can slow a founder down.
The NYC ecosystem continues to grow and grow and we were excited to be a part of this SAP.iO Foundry event and spend time with this amazing cohort of companies. If you liked “Notes From The NYC SAP.iO Foundry Event” and want to read more content from the Bowery Capital Team, check out other relevant posts from the Bowery Capital Blog.