Richard Montañez grew up in Guasti, a small town close to Ontario, California, and barely spoke English. Montañez dropped out of high school and worked as a janitor. But he had an idea — an invention of sorts. Hoping to create something for the Hispanic community, Montañez developed his own recipe, and pitched his idea to his company’s CEO. Montañez’s recipe later became the Flamin’ Hot Cheetos, and his fearless pitch not only landed his creation in supermarket shelves worldwide, but also earned him an executive position in Multicultural Sales & Community Promotions across PepsiCo’s North American divisions.
The Latino community is filled with stories like Montañez’s: inventors and dreamers curating life-changing and profitable ideas, while fostering an impeccable work ethic. However, the sluggish economic growth within this sector of the U.S. population poses a threat to the nation’s economy. “The Ever-Growing Gap: Without Change, African-American and Latino Families Won’t Match White Wealth for Centuries,” a study published by CFED & Institute for Policy Studies, reveals that over the past 30 years, “the average wealth of white families has grown by 84 percent, three times as fast as the rate for African-American families and 1.2 times the growth rate for Latino families.” The result? American families in financial distress reset their economic contributions into survival mode, preventing the much needed capital and entrepreneurial injection into our nation’s growth. In fact, sometimes Latinos are forced to rescue our own in unprecedented ways. Take, for instance, the story of Fidencio Sánchez, dubbed “paleta man.” On September 9, Joel Cervantes Macías posted a GoFundMe campaign to help Sánchez, an 89-year-old pushcart vendor in Chicago’s Little Village neighborhood. Restaurant owner Cervantes was struck by sight of the frail old man still trying to make a living. Sánchez had retired but was forced to push his cart after his daughter died, losing any support for him and his grandchildren. The community came together, lauded his work ethic and raised $384,290.
Economy goes beyond financial injections; it involves community equity building.
Latinos entrepreneurs lack access to capital and financial know-how. Only about 1 percent of all Latino-owned businesses created between 2007 and 2012 received venture capital or angel investments. Furthermore, particular cultural traits, like the fear of rescinding ownership of an established family business, may slow down the smooth sailing toward the American Dream. The report, “Better Business: How Hispanic Entrepreneurs Are Beating Expectations and Bolstering the U.S. Economy,” shows the growth of Latino entrepreneurs in America over the past two decades. In fact, a recent study by Stanford Graduate School of Business shows that Latino businesses could have generated an additional $1.4 trillion in 2012 if they had been of equal average size to non-Latino businesses. Despite all these odds, Latinos opened 86 percent of all the new businesses created between 2007 and 2012. As SBA administrator Maria Contreras-Sweet states,“The face of American entrepreneurship is changing; more belong to women, African-, Asian-, Native, and Hispanic Americans.” To help solve this $1.4 trillion problem, a handful of Latino leaders have stepped up to foster economic success.
Take XL Alliance CEO and World Economic Forum leader Lili Gil Valletta, who launched a project to help fill the gaps in access, opportunity and wealth many Hispanic entrepreneurs face in the United States. Inspired by her own experiences, not only as a Latina businesswoman, but also as an immigrant, she assembled a one-of-a-kind alliance with best-selling author and “TV’s Billion Dollar Man” Bob Circosta to create Dreamers Ventures, an investment accelerator for Latino entrepreneurs. They’ve partnered with leading entertainment and lifestyle retailer, HSN, for a groundbreaking pipeline program called Project American Dreams. This is a business competition; a “Beyond the Tank meets Make Me a Millionaire Inventor” program, Latino-style. The program will capture the entrepreneurial spirit of Latinos in the United States, while following their real-life journey going from startup to stardom. Now, this is not just another reality TV show, no. It will feature a bootcamp-like mentorship program, which includes: pitching, brand development, financial education, business strategy and capital resources. HSN will launch and sell the winning invention. This is a great opportunity for Latinos with innovative products to take a shot and self-create work.
Also, take twin brothers Sean and Kenny Salas, Harvard Business School students, and their start-up Camino Financial. They were inspired to venture into the financial business after their mother lost her Mexican restaurant chain after 25 years. They created a credit marketplace matching small businesses with the most affordable funding option, specializing in originating loans for small businesses seeking an alternative capital source to a bank. Their mission: to pin its own growth on helping small Latino businesses reach their full potential. They help small businesses find funding and secure capital. Legal moneylenders in Singapore have been impressed by this model and have begun emulating them. The market is full of worthy start ups to help out. They provide technical, financial assistance — especially to raise future entrepreneurs raise their credit scores — apply for financing and financial literacy to achieve success. In fact, just recently they raised $2 million in equity financing.
José Galindo came to California from his native Colombia and noticed a huge disconnect, not only socio-politically, but also financially. So he set out to create and launch MoneyMio, the first personal finance website focused on Latinos in the United States with the mission of empowering our community. MoneyMio is the first consumer platform to provide bilingual and culturally relevant financial educational content and comparison tools. In speaking with Gozamos, Galindo explains: “The mission is to provide Latino/as with the tailored content and the tools our community needs to become financially literate; from how to open a bank account, to comparison tools on the best credit card. We want to help consumers reach their financial goals.” Latinos aiming to take control of their financial future, have a place visit and learn how to achieve these goals.
These entrepreneurs are committed to seeing Latinos’ economic growth and self-sustainability. If you grow, I grow. Their seed capital and inventions will provide the community with more alternatives to patron and promote local businesses and purchase Latino/a made products. It’s time for all to realize that Latino’s economy is the nation’s economy.