Giving Compass' Take:
- Despite Latine-led businesses growing, investment and funding have not matched growth to support these leaders.
- How can supporting diverse leadership help increase impact? What are the roots of these capital funding gaps?
- Read more about equitable funding for diverse business founders.
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In recent years, Latine business owners have shown significant growth. But year over year, investment numbers lag behind the trend. Average monthly business applications were 50% higher in 2021-2023 than in previous years, with nearly one quarter of all new entrepreneurs identifying as Latino, per the Treasury Department. Meanwhile, in that same year, Latinos only received 2% of venture funding, Wired reported. Similar representation was reflected in the number of investment partner positions held by Latinos in U.S. venture capital firms, reported as 5% by Venture Forward, the National Venture Capital Association, and Deloitte.
Noramay Cadena, managing partner and co-founder at Supply Change Capital, is no stranger to these stats and finding creative ways to navigate the ecosystem as a fund manager.
“When the status quo runs so deep, creativity is the only way to effect systems-level change,” she said. “For many Latine fund managers like me, this means a reliance on being scrappy and on building partnerships that allow us to play offense our way.”
Cadena is one eight recipients of a new capital program on a mission to address this disparity among emerging Latine fund managers, called Alzar (a Spanish translation of “uplift”). The pilot program, launched by LaFamilia Foundation — a nonprofit organization closing resource gaps for Latine founders and investors — plans to provide operational capital to qualified fund general partners. Those dollars will be invested across various industries, theses, and geographies via a $250,000 grant, in partnership with the Sorenson Impact Foundation.
“We believe that the most sustainable path to increasing access to capital for founders in our community is by dramatically increasing the number of Latine VCs and size of Latine-managed VC funds, and the best way to start is by financially supporting the best and brightest emerging Latine fund managers,” says Cheryl Campos, cofounder and CEO of LaFamilia Foundation.
Read the full article about Latino fund managers by Lyanne Alfaro at Forbes.