As the United States approaches a potential recession, economists and business leaders are making their minds up looking for ways to improve the country’s financial health.
For Solomon “Sol” Trujillo, the answer is simple: invest in a Latino-owned business.
In 2019, he founded Trujillo, 70 Latitude VenturesA venture capital firm (VC) that invests exclusively in Latino-owned businesses. Trujillo is a general partner at L’Attitude Ventures along with former United Airlines CEO and Chairman Oscar Munoz, Kenny Blanco, Laura Moreno Lucas and Gary Acosta, who is also one of the company’s founders.
Latinos are the fastest-growing demographic among US entrepreneurs, with the potential to add 5.3 million new jobs and $1.5 trillion to the US economy in the coming years, according to the Stanford Latino Entrepreneurship Initiative. By 2030, McKinsey & Company. It is estimated that 1 in 5 American workers will be Latino.
However, Latinos are the most capital-starved growth group in the country — in 2021, startups and US companies with Latino founders received less than 2% of total venture capital funding, according to Bain & Co.
“Instead of continuing to try to explain why this lack of investment is a problem and the opportunities that exist in this group, I decided to build a prototype that would show people how it might work,” Trujillo says. CNBC Make It.
“We want people to see that there are a lot of companies that can grow and stimulate our country’s GDP with the right support.”
Trujillo, an international CEO who served as CEO of three large global corporations (US Western, Orange and Telstra), is tired of seeing Latino founders get paid. closed out of financing and traditional network systems in the world of venture capital. He knew that if Hispanics and Latinos were fully and equitably included in the American economy, the gains could be enormous.
L’Attitude Ventures provides capital and mentorship to entrepreneurs the company invests as well as links with businesses and distribution channels for founders to grow their companies.
The company closed its first institutional fund in August, Raised over $100 million Through a strategic investment by JPMorgan Chase and investments from other big financial names including Barclays, Bank of America and Morgan Stanley.
Trujillo describes the fund as an “opening shot” of what he hopes will become an “investment boom” geared toward Latino-run companies.
These funds have benefited dozens of companies across the United States including Progeny Coffee Farmers; Nopalera, a Mexican bath and body product line; and Raddle, an online collaboration platform for small businesses.
L’Attitude Ventures also hosts an annual show and competition where early stage Latin entrepreneurs meet with capital from long-term investors. Their latest event, held in September, hosted famous faces such as former President Barack Obama and the creator of ‘Hamilton’. Lin Manuel Miranda.
While other companies are “well-meaning” in expressing their interest in ESG investing, and making speeches about the importance of diversity and inclusion in their mission, their investment strategies have not caught up with the 21st century, Trujillo argues.
“Companies raise capital, and then look for opportunities in the same places as they did in the ’80s and ’90s. But markets and populations evolve, right?” He says. “We’ve found that the Latino group is the most productive and entrepreneurial group of all the groups in the United States … If you believe in capitalism, and that’s what I believe in, because I think it works 92.5% of the time, you’re pouring capital into where the growth is, This is not happening.”
Trujillo says the harmful stereotypes that continue to plague Hispanic and Latino Americans are partly to blame for the funding gap. “People will say that Latinos are uneducated, that they are not businessmen, that they are not this or that … which is completely wrong,” he says.
Trujillo adds that the result of investing in Latino-owned businesses is a stronger US economy that “benefits everyone.” The economic output of Latinos in the United States reached $2.8 trillion in 2020, a figure higher than the GDP of the United Kingdom, India or France, according to a report by Collaboration of Latin Donors In partnership with Wells Fargo.
“What we do here is not just ensuring that Latino-owned businesses succeed,” Trujillo says. “This is a smart economic strategy that we know will certainly help the US economy remain competitive not only now but for the rest of this century.”
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