Even though Latinos continue to display their entrepreneurial spirit – between 2007 and 2012 Latinos started 86 percent of new businesses in the United States – they fall behind when it comes to access to funding. A 2015 Stanford Graduate School of Business survey found that only 6 percent of Latino-owned businesses used commercial loans. And when it comes to venture capital funding, it’s even lower at 1 percent, according to CNN. More than half of the 1,800 businesses surveyed reported that a lack of funding has hindered their ability to grow. Being underserved doesn’t just negatively affect these owners, it also impacts the economy as a whole. Or as CNN explains, “America’s Latino entrepreneurs are lying in wait – sitting on a potential $1.4 trillion in revenue boost to the economy.”
500 Startups has taken notice and is raising $25 million to invest in black and Latino entrepreneurs. This money will give about 100 companies (about $250,000 per company) access to “capital, networks, and expertise that they need to grow their businesses,” according to the company blog. Monique Woodard – who joined 500 Startups as its first African-American venture partner – will head this initiative, which will help bring more diversity to the tech industry. “This is a two-sided investing strategy,” she said. “On one side, you have Black and Latino founders who are undercapitalized and there are great deals to be made. On the other side, you have a population that over-indexes in many areas of technology consumption, increased consumer purchasing power, and an increase in the US Spanish-speaking population. This is making Black and Latino consumers a market that investors should be paying attention to.”
While there’s currently limited information on the program, Woodard has given us a little more insight into the microfund via her Twitter account. There, she shared that the fund isn’t limited to just US citizens, just people who are working on “cool shit” in the US.
Since there’s currently no way to apply for the funding, make sure to follow Monique on Twitter to get the latest information.