In Early-Stage Investing, Diversity Brought Us Together

Apr 29, 2022

Image: StartGlobal Co-founder and CEO Sanjay Nediyara

By Sunil Sharma, managing director of the Techstars Toronto Accelerator

StartGlobal is exactly the kind of company that we want to invest in at Techstars. 

Its SaaS platform makes it easier than ever for founders to start new businesses by combining all of the steps that go into company formation – helping entrepreneurs with paperwork, jumping through legal hoops, setting up a bank account, managing taxes, compliance, and more. The company has heavy hitters like Twitter’s Biz Stone on its advisory board and is a member of Techstars Toronto’s 2022 class.

But it has not been an easy road for co-founder and CEO and founder Sanjay Nediyara, who has been hearing impaired since he was a teenager. Living in Bangalore, India and faced with his communication challenges, Sanjay may not have been an ideal fit for an accelerator program held halfway around the world and with peers and mentors who did not know sign language. But he is a remarkable programmer and an incredible entrepreneur.

We at Techstars Toronto believed in what StartGlobal was building and wanted to invest in them and their future. And, as with everything else over the last few years, technology provided a solution. By utilizing the closed captioning option on Zoom, and tapping Google Translate as needed, Sanjay and his team are able to fully participate in our 13-week hybrid remote program  alongside the rest of the class. In fact, after accepting StartGlobal to our program, we learned that Sanjay does not know sign language himself and primarily relies on lip reading for communication. There would have been no way for StartGlobal to participate in our program if not for our virtual programming format and the closed captioning features of the technology we leverage to operate Techstars Toronto.

Sanjay is just one example, but his story points to a larger truth: Techstars wants to invest in the best founders and companies in the world, and it is our job to make sure we do just that. Whether this involves leveraging tools to help disabled CEOs communicate or sourcing companies from traditionally overlooked markets.

As a result, our classes often look different than most.

Case in point, the 2022 Techstars Toronto class is 100% diverse with zero companies founded solely by white men. On the surface, this may look like the result of corporate diversity, equity & inclusion (DE&I) effort, but the reality is far simpler. Our investment strategy is built around looking at parts of the world where technology companies are on the rise and markets where there is growing investor interest. Right now, many of those stories are happening in Africa, Pakistan, India, Vietnam and other parts of the world, so that is where our founders are coming from. It might look like DE&I, but it is actually the end result of our process, not the initial goal.

That is not to overlook the reality facing founders in many parts of the world. According to a 2019 Crunchbase survey, about 77% of U.S. startup founders are White and that number jumps to 84% in Europe, where less than 1% of entrepreneurs identify as Black, African or Caribbean. Gender diversity is a problem as well. According to another Crunchbase study, women-led startups received less than 3% of all venture capital funding in 2020 and less than 20% of all funding in 2021 went to startups with at least one female founder.

Not a good look for the industry.

But central to our work at Techstars is the understanding that entrepreneurship can be transformational, both for founders as well as the investors and markets they work with. We are here to give these startups the advantages they need to succeed, and at Techstars Toronto that includes sourcing and investing in the best startups, including underrepresented entrepreneurs. Now in our fifth year, those efforts have become self-perpetuating; our diverse alumni refer other diverse companies and founders and the result is inclusive classes like our most recent.

That naturally leads to more DE&I portfolio company selections – enabling Techstars to benefit more entrepreneurs while elevating our access as early-stage investors.