Latino- and Latina-owned businesses represent the fastest growing demographic in the U.S. business, ecosystem growing revenues and creating jobs for all Americans, according to the Stanford Graduate School of Business.
The number of Latino/a-owned businesses grew by 34% from 2007 to 2019, while existing businesses grew at a median rate of 25% between 2019 and 2022. Even at these rapid rates, there is still room to grow. Estimates from McKinsey show the potential for Latino/a owners to generate an extra $2.3 trillion in economic benefits, given equal funding opportunities.
Latino/a entrepreneurs and funding
A 2023 Stanford report revealed that although more than 10% of all Latino/a-owned businesses were in technology fields, they received less than 1% percent of all VC funding in 2021. A more current McKinsey report found Latino/a founders to have received a slightly higher 1.5% of all VC funding in 2022.
These numbers are even more lopsided when broken down by gender. Only 0.1% of VC funding went towards Black and Latina women founders, meaning that Latina women founders received under a tenth of a percent of VC funding.
Latino/a-owned businesses face significant obstacles to growth, including accessing capital and securing contracts from the government and private sector. Despite these impediments, the number of Latino/a-owned businesses grew by 34%, compared to a 7% decline in the number of white-owned businesses, from 2007 to 2019. Additionally, Latino/a-owned businesses grew at a median rate of 25% from 2019 to 2022, while white-owned businesses grew 9% over the same period. These figures come from the Stanford report mentioned above.
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