Representing one of the fastest growing sectors in Hispanic business today.
By Maria Botta (Contributor, Latin Business Today)
There is no doubt that small business and entrepreneurship has the potential to turn the US economy around, and both private equity and the Federal Government have initiated programs that support the growth of the next “Gazelle” or fast growing startup with the potential of becoming the next Google or Apple. But in between the established “giants” and the “gazelles” lies a whole territory of smaller companies that also help to fuel the economy – smaller companies from yoga studios, cleaning services to cupcake shops.
So how are women entrepreneurs doing? The answer is – not so great, but according to the Kauffman Foundation study “Overcoming the Gender GAP: Women Entrepreneurs as Economic Drivers”, women are not fairing that well in the entrepreneurial sector. In fact, there is a wide gap. The study shows that although nearly half of the workforce and more than half of our college students are women, their lag in building high-growth firms has become a major economic deficit.
The American Express OPEN Forum report for 2011 found that just 1.8% of women-owned firms had revenues of more than $1 million, while men-owned firms, 6.3%.
How Are Latina Entrepreneurs Fairing?
While scanning the “Top” lists of several business publications I was struck by the lack of Latinas, in fact, on Inc’s 2011, Top 10 Latino and Hispanic Entrepreneurs – not one Latina, and I wondered why aren’t there more of us?
This doesn’t mean that Latinas are not launching new businesses, but it would seem that we are somewhat “invisible” entrepreneurs… and terribly underrepresented in the media and in scholarly research. What’s very interesting is that, Federal Reserve data shows that there is a huge surge (almost 60%) in the Hispanic entrepreneurial sector, and even though entrepreneurial ventures by Hispanic women are lagging slightly behind Hispanic men, they are ahead of non-Hispanic women. It is clear from these statistics that Hispanic business is on the rise.
One of the reasons that we may be “invisible” is that Latina entrepreneurs are concentrated in the micro-entrepreneur sector and most of those businesses have lower earnings. Although the bulk of Latina entrepreneurs are concentrated in this sector, according to the study “Latina Entrepreneurship” by Magnus Lofstrom and Timothy Bates, “Latinas possessing the same levels of traits regarding education, immigrant status, and the like actually earn more than their white-women counterparts pursuing entrepreneurship”.
Yet, this surge of Hispanic business seems to have gone unnoticed, and must be addressed, if this movement is happening without any significant support – can you imagine the economic effects if Latina entrepreneurship where nurtured and supported by government and private equity? What financial outcomes and success rates would we experience if we started to see some Latina oriented entrepreneurial programs? And what could it mean to private wealth creation in this growing demographic?
The self-employment rate of foreign-born Hispanic women twice exceeded that of U.S.-born Hispanic women (11.5% compared to 5.3%), making foreign-born Hispanic women one of the fastest growing entrepreneurial populations in the US!
Despite the fact that Latina entrepreneurship is on the rise, there has been little research done in this area, hardly any government support and I am not at this time aware of ANY corporate initiatives developed specifically for the needs of Latina entrepreneurs.
There is no data on the success rate of these Latina businesses or in what business classification they are focused on, or where geographically these businesses are concentrated. Sounds like there is a tremendous need to fill. Imagine the untapped economic potential of Latina entrepreneurs!
We must consider fostering Latina entrepreneurship as an economic issue, not an ethnic or gender-equity based issue. Simply put –we are missing a big chunk of this country’s business power and potential.
What Kind Of Support For Entrepreneurs Is Out There Now?
If you are considering starting a new business or expanding an early stage business, it is a good strategy to get into one of these programs because studies show that start-up ventures that graduate from an incubation or accelerator program have a success rate of 87%, compared to 44% for all other firms – those are big numbers that cannot be ignored.
While there are no incubators specifically targeted to Latinas, Metro Tech in Oklahoma City, OK specifically targets Hispanic business. You can also go to the National Business Incubator Association page and find a business incubator in your area.
Here are 20 incubators and accelerator programs in the US. This list is in no particular order or ranking.
- Astia offers programs for women run high-growth startups.
- Women 2.0 – Pitch, not a traditional incubator.
- West Enterprise Center – Albuquerque, N.M.
- Mi Kitchen es su Kitchen – New York, N.Y. (focused on food businesses).
- DreamIt Ventures – Philadelphia, PA.
- Georgia Tech’s Advanced Technology Development Center – Atlanta, GA.
- Launch Pad Ignition – New Orleans, LA.
- SENO – Social entrepreneurship, New Orleans, LA.
- TechStars – accelerators (Boston, Boulder, New York City and Seattle).
- MassChallenge – Boston, MA.
- Y Combinator – Silicon Valley, CA.
- NYC SeedStart – New York, NY.
- Santa Fe Business Incubator – Santa Fe, NM.
- Accelerator Corp. – Seattle, WA (biotech startups).
- Long Island High Technology Incubator – Stony Brook, NY.
- The Shoals Entrepreneurial Center – Florence, AL.
- Innovation Depot – Birmingham, AL.
- LaunchBox Digital – Washington, DC.
- Metro Tech – Oklahoma City, OK (for Latino entrepreneurs).
- Plug and Play Tech Center – Sunnyvale, CA.
In order to figure out the best fit for your business, do your research and talk to people about their experiences during the program and ask for:
- Success rates
- Funding figures for the overall program
- What will their stake be in your company
- How will they help you with management and future growth
As it is becoming increasingly competitive to secure traditional Venture capital, incubator and accelerators hold the promise of growing new Hispanic Business.
Other options for you startup may be angel investors, while the focus of these investors is generally for smaller amounts (below $1 million), they offer many of the same advantages as larger VC firms, you can locate them at the Angel Capital Association they also have a great Q&A section on their website.
The best thing you can do to successfully launch a business is to become educated in everything that pertains to starting your business – and that includes planning for the pitfalls (and there are many) and very important – funding. As a Latina entrepreneur who has bootstrapped 2 ventures, I can tell you it is hard work, long hours and dogged determination that will get you started, then comes the really hard work of making it through the first 3 years, but the rewards are economic independence and an amazing sense of satisfaction that makes it all worth it.
With few answers on how to turn this economic mess around, we must consider how to foster the Hispanic entrepreneurial sector, specifically the huge untapped economics of Latina entrepreneurs.
This post was originally posted at Latin Business Today.
Pictured above: Alicia Morga. Photo credit: Gabriela Hasbun.
About the guest blogger: Maria Botta is a regular contributor to Latin Business Today. She writes on business topics, creativity and Latina entrepreneurship. Maria has worked as a Creative Consultant and Producer, creating relevant and engaging online video content. She holds an EMBA in Global Management from Thunderbird’s prestigious European program in Geneva, Switzerland and an Art History degree from Mt. Holyoke College. Follow her on Twitter at @MariaBotta.