Editor’s Note: Originally published on Medium. The California Economic Summit is focused on job creation with a triple bottom line focus of the economy, environment and equity. That goal includes increasing California entrepreneurs’ access to capital so they can startup and grow. The following guest blog from Deldelp Medina, co-founder and CEO of Avión Ventures, focuses on the importance of capital investment in Latina entrepreneurs and their startups.
As an entrepreneur in the tech industry, I don’t want your charity. I want your investment.
To be clear, I have nothing against non-profits. I have been the President of Latino Startup Alliance and on the board of several other great cultural institutions and some of my best friends run great non-profits. But that is not the opportunity I am offering you. I am giving you the chance to make money.
I am asking for investment, which is defined by the all-knowing Google, as the action or process of investing money for profit or material result. If you are a savvy business person, you should be salivating at the opportunity to invest in those who can bring back great economic returns, i.e. material results.
That is why our process at Avion Tech is exacting. Latinas are making great products for mass markets that have traction and meet the needs of their customers. They need capital to scale and make great impact.
Top Four Reasons Why You Need To Be Investing in Latina Startups:
1. Donating without investing is not a profitable business idea
With the rise of impact investing, some people are confusing the idea of donating with the tool of capital investment. Investment typically buys you equity in a business; it gives you access to influencing the way an enterprise grows, and, therefore increases your chances for profit over time. A donation is indeed a type of investment, which does not buy you equity, does not give you access to influence, and limits your assurance of returns. It also doesn’t give the entrepreneur the ability to scale their product. A donation to a worthy cause can have returns — such as the gratification of greener park, or cleaner streets, or keeping arts in the schools.
But if you donate, and you don’t invest, the enterprise is subjected to be continuously be fundraising. I want to train Latinas to create profitable companies rather operate non-profits that are continuously are asking for money.
2. Women-owned businesses are more profitable
There are many reasons why investing in Latinas is wise. One main reason is that women-owned businesses are generally more profitable than others. Not only that, women also generate more profits even when funded at lower rates than their male counterparts.
But let’s dissect this further. According to Nielsen, Latinas are the growth engine of the U.S. female population. By 2060, Latinas will be 30 percent of the total female population in this country. In addition, today, Latinas are starting businesses at a faster pace than any other subgroup in the U.S.
Investing in Latinas = to investing in women
Investing in women = wise & secure investment
3. Latinas are starting more businesses than any other group in the U.S.
It is insufficient to state that Latinas are starting businesses faster than any other group. In reality, Hispanic-Owned businesses are getting starting at more than twice the national rate. In the U.S., the national rate of business creation is about 18 percent. According to the U.S. Census Bureau, the number of new Hispanic-owned enterprises between 2002–2007 grew 43 percent, equivalent to 2.3 million new businesses.
There is a cultural shift that makes this critically important for the United States. Hispanics are primarily bilingual and bicultural. They navigate two worlds and reach a much broader geography than their counterparts. Hispanics watch English television and listen to Latin radio. They eat at Italian restaurants and dance in Latin night clubs. They go to Spanish-speaking churches and practice yoga. Therefore, the businesses that Hispanics start are, by design, able to meet the needs of larger segments of the population. They #DumpTrump and will decide the next election, they are powerful.
4. Latinas are creating mass market products
“Latinas are more educated, tech savvy and connected, allowing them to write their own destinies and challenge the dynamic of Hispanic households.” – Nielsen
Contrary to popular belief, Latinas are not primarily maids or housekeepers, nor do they stay home to raise children. Hispanic women are leading in both college enrollment and graduation, pursuing challenging vocations, and most importantly, managing the $1.2 Trillion buying power of the collective Latino household.
Latinas make 80 percent of the household shopping decisions. Furthermore, in 2012, 86 percent of Hispanics said they owned a cellphone, up from 76 percent in 2009 (Pew Research). What is the result? Latinas are the leading users of consumer & mobile technology, and they are using it to spend literally trillions of dollars.
So, who is best qualified to design, create, and execute the kind of mobile technology that will revolutionize the fastest growing markets in the United States? The answer is obvious, Latinas.
One question remains: Will you make a business investment?
Deldelp Medina is co-founder and CEO of Avión Ventures.