Seeing Latine: Why Latine founders deserve to be seen in the VC landscape

13 min readDec 12, 2022

Updated: September 2023

It’s no secret that the representation and support of Latine founders in VC and entrepreneurship have been historically low.

In 2021, Latine founders received just roughly 2.1% of VC funding, according to data collected by Crunchbase, and in 2022, Crunchbase reported that funding to U.S.-based Latine-founded companies plummeted more than 80%. Bain Research also reported that out of the top 500 VC and private equity deals made in the ecosystem, less than 1% of those deals involved a Latine founder.

Understanding the Latine demographic in the U.S. today, the 2022 US Census found that 19.1% of the population identify as Hispanic or Latino, making the Latine demographic the nation’s largest ethnic minority. That amounts to nearly one in five people in the United States: over 63.7 million people. Latine individuals have therefore become an integral part of the country, and the Latine members of the Millennial and Gen-Z generations are paving the way for a more diverse, inclusive, and innovative society.

Typically identified as a population born around 1997, the Pew Research Center found that nearly half of the Gen-Z population identify as a racial or ethnic minority. Compared to Millennials (the generation before, born between 1981 and 1996), 10% more Gen-Z people are part of a racial or ethnic minority, with a full 25% identifying as Hispanic or Latino. An increasingly diverse new generation of students, parents and workers is therefore starting to enter adult life in the United States, and such shifts will translate into an exciting transformation of the nation’s workplace and culture. Current norms and ways of working in the world will therefore need to keep up with the fast pace of change each new generation brings.

Hispanic and Latine populations make up a significant portion of this new generation, and they also bring a unique set of strengths and skills to the table that can contribute to the innovation and consequent success of organizations. Additionally, introducing a more diverse workforce creates a need for expanding the culture to embrace unique perspectives and support the inclusion of underrepresented groups.

Seeing Latine is here to provide a brief overview of the Gen-Z Latine population, Latine representation in the VC and entrepreneurial landscapes, and the knowledge we have gathered from leaders who are actively working to make the tech and start-up ecosystem more racially and ethnically inclusive and culturally aware. It is by no means exhaustive, but we hope this overview and the resources we provide at the end of this reading will jumpstart that journey for you.

A Note on Terminology

You may notice that various resources we quote use the terms Latino, Latina, Latinx, and Hispanic interchangeably. In our writing, we will use Latine in order to be inclusive, but we understand that not all members of the populations we discuss here identify with that term. In conversation with any Latine person, the best practice is to simply ask which term they use.

Each of the above words is associated with the populations coming from Latin America — a group of countries in North America, the Caribbean, Central America, and South America — in varying rates and definitions. Because this demographic is so geographically and culturally diverse, there are a number of terms that people feel comfortable with. Below is a brief description of the terms you may hear.

If you would like to read more, we will include more resources at the end of this reading. The Getty Center provides a helpful primer if you would like a bit more historical context.

Growing Up Latine

Because this generation is still growing up, as it were, there needs to be more research about Latine members of Gen-Z. However, we do have some demographic data about the families and communities that surround them. A Pew Research study about young Latine people found that “with a median age of 28, Latinos are also the nation’s youngest major racial or ethnic group.” Another article has found that Gen-Z has slightly fewer immigrant backgrounds, but is much more likely to be the child of an immigrant. Even more specifically, the median age of Latine people born in the United States is only 20, which means that more than half are members of Gen Z.

Dario Anaya, Latine entrepreneur and Founder of Pupil, can identify with these scenarios of being a Gen Z Latino with parents from different backgrounds. His father, who immigrated from Mexico and didn’t have the opportunity to finish his education, instilled the importance of hard work in Anaya from an early age, as well as his Puerto Rican mother who had pursued education and saw firsthand the value in it. His parents’ work ethic inspired him to prioritize hard work despite the traditional education system not coming naturally to him.

“I was a class clown,” Anaya said. “But I saw how hard my parents worked and knew that I could make something for myself despite obstacles. I wasn’t the best in school but made it into the top prep school in Indiana based on great recommendation letters because of my drive. I admired my dad’s work but knew I didn’t want to be a landscaper. I wanted to be able to have the option to make it out of where I came from.”

Anaya did in fact make a name for himself outside of Indiana, becoming an entrepreneur and a recent Top 100 Latine Founders to Watch List ‘22 by age of 18. When asked about his own experience being a Latine entrepreneur, Anaya noted that this idea of creating your own business or “thing to solve a problem” isn’t foreign to the culture.

“Within the Latine community, everyone is entrepreneurial,” Anaya said. “Everyone always has some idea or is selling different things. You see people like us, trying to make a living somehow for ourselves, whether we’re able to or not. We don’t come from [backgrounds] that allow that to be easy, but we have a strong work ethic because we’re always underestimated, we’re always belittled.”

Anaya added that Latine entrepreneurs represent the underdogs that are often met with little help from the historical entrepreneurship ecosystem but are loved and supported by their own communities.

“We understand that if we work harder than you and don’t care [what you think], we’re going to make it above you,” Anaya said. “All of the barriers we encounter just help us shine brighter.”

In a research paper for the Hispanic Journal of Behavioral Sciences about the younger Latine generations, Donna Maria Blancero and her colleagues conclude that “many Latinos develop biculturally with commitment and knowledge of American culture and the culture of their ethnic heritage.”

Since the first members of Gen-Z were born during and grew up in the advent of technology’s exponential rise in access and innovation, they are more fluent in and comfortable with new forms of technology and social media than previous generations. The Pew Research Center found that 95% of the members of Gen-Z they surveyed had access to a smartphone, and the majority are online for much of the day: “44% are online ‘almost constantly,’ and an additional 44% say they’re online several times a day.” Much of that time is spent on social media platforms, with Instagram (76%), Snapchat (75%), or TikTok (55%). Influencers, or celebrities who have risen to stardom through their “influence” on social media, are particularly popular with Gen-Z, and Latine influencers are prevalent in those spaces. These digital platforms are opening up conversations across the globe.

Like the influencers they admire, the younger Latine generations are coming from an incredibly diverse array of backgrounds. Some are born outside of the United States and immigrate here; others are born here and spend their entire lives in the US or moving back and forth.

Moving to the United States adds a variety of opportunities and stressors. On top of the challenges of simply growing up — making friends, finding your passions, getting along with your friends and family — Latine children must also juggle the difficulties of learning English and their native languages, learning to navigate a new culture, and also staying connected to their old homes and distant families. There is a regular refrain of pressure to succeed: to take these opportunities and make the most of them. This begins with education.

Education

One of the most significant changes between Millennial and Gen-Z Latine populations is that the younger generation is growing up in increasingly higher-educated households, and as the older members of Gen-Z graduate high school, we are seeing exciting increases in the number of students choosing to attend college.

According to research about education in Latine populations from 2018, 26% of Latino immigrants over the age of 25 had a bachelor’s degree or more education, as opposed to a mere 10% in 1990. Following a US-wide increase in college enrollment and graduation, 11% of Gen-Z are more likely than Millennials to have parents with a college education, meaning that more well-educated young people are entering the workforce.

Having well-educated parents doesn’t always correlate with a high-quality education, however. Predominantly immigrant communities tend to live in redlined communities, where schools are poorly funded and do not provide as high a quality of education as many majority-white communities. Older students who immigrate to the US struggle to transfer credits from their old schools.

Consequently, while we are seeing more Latine students graduate high school and attend college, research shows that while they “are enrolling in college in record numbers, on par with rates of white students and “uninformed or confused about the college application and/or financing process with only 44% of Hispanic parents aware of the Federal Pell Grant program, compared with 81% of white parents and 82% of black parents.” Paying for college is also a significant stressor for young Latine students: 70% have unmet financial need, and 77% “reported often feeling lost when researching financial options.”

However, when young Latine students do find opportunities for academically rigorous coursework and support from teachers and guidance counselors, they prove their resilience and go to high-tier colleges. Finding mentors and experienced students and professionals who can guide them through the college and job application process is absolutely necessary, and programs like the Posse Foundation, Management leadership for Tomorrow, ALPFA, and Jumpstart, are making a difference by building cohorts of students from under-resourced communities and providing support and resources as they apply to college and prepare to enter the workforce.

It is also important to note that a college education is not the only path that Latine Gen-Z students are following. Gap years, service years, and apprenticeships are becoming increasingly popular as young people begin to look outside the typical college pathway. Technical degrees in the medical, mechanical, and technological fields are also alternative options to the traditional four-year college education, with learning platforms like General Assembly providing opportunities for education outside the typical classroom or service programs like Teach for America or Americorps supporting more civil-service-based work.

Others are becoming entrepreneurs. In 2018, Anna Powers wrote in an article in Forbes that Gen-Z is increasingly seeking “a more malleable career path where they are not defined,” quoting a 2018 Universum Global survey finding that 56% of the 50,000 Gen-Z individuals they surveyed would consider forgoing college and immediately entering the workforce.

Research from Inicio ventures shows that “Latinos make up 1 in 4 new entrepreneurs, with 72% of Latino founders facing funding shortfalls, 70% relying on personal savings, and 1.8% becoming venture-backed.” Additionally, a report by Bain & Company found that $1.4 trillion in revenue growth ($3.3 Trillion by 2030) could be unlocked if Latino-owned businesses had the same access to capital as white-owned businesses.

From the Workplace to Entrepreneurship

With more Gen-Z Latine professionals entering office cultures, there is also a need to address the various difficulties people from underrepresented communities face when they enter a predominantly-white field. In a 2019 Pew Research study about race in the United States, 58% of Hispanic populations report experiencing discrimination, and over a quarter of that percentage specifically connect that discrimination with the workplace. Additionally, according to a recent report from Refinery 29, the number of Latinas in the workforce dropped by 2.74% between March 2020 and March 2021, meaning there are 336,000 fewer Latinas in the labor force.”

The skills and unique perspectives Gen-Z Latine professionals are beginning to introduce to the workforce — ease in connecting across cultures and borders, technological proficiency, bilingual communication, flexibility, and adaptability, for example — are ones that will drive innovation and positive growth and encourage people to be authentically themselves. Adding their unique voice to the conversation is absolutely necessary.

While this is a personal transformation that many Latine professionals have to experience in order to truly be themselves at work, organizational culture must reshape itself to support that transition.

As venture capitalists in the startup ecosystem, we must make sure we don’t replicate the same workplace challenges that harm Latinos by providing authentic equity and equal opportunities for them to be represented as investors, portfolio founders, mentors, and beyond, while additionally opening our networks to further their support.

Looking Forward

Whenever we speak with Latine students and professionals about the future, we hear an overwhelming sense of hope and excitement for the future. According to a recent report by Inicio Ventures, “the total economic output of US Latinos was $2.7 trillion in 2019, making US Latinos the equivalent of the seventh-largest economy in the world. Latinos are a rapidly growing cohort, with the US Latino population surpassing 60 million in 2019 and set to double over the next four decades.” Latine populations are reshaping the economy of the United States, and the workplace must follow suit.

Just as Latine members of the Gen-Z population have grown up in a multicultural world and learned to navigate an increasingly diverse space that requires flexibility, curiosity, and creativity, so too will the Venture Capital ecosystem grow and adapt to foster that positive change.

Summary of Recommendations

Though not an exhaustive list, this short summary of recommendations should provide a helpful reminder for any organization or fund seeking to invest in Latine entrepreneurs.

Make Diversity, Equity, and Inclusion an Actionable Priority
Go beyond values and take actionable steps to attract and recruit Latine investors and promote them to Partner positions, or invest in emerging Latine managers.

Develop Outreach Initiatives that Find, Educate, and Empower Young Latine Populations
Find ways to build relationships with Latine communities that will provide adequate preparation for Latine Gen-Z populations to enter the tech and venture capital ecosystem.

Unlock Barriers in the Due Diligence Process
Create and employ strategies and technologies to prevent microaggressions and implicit biases from affecting the due diligence process.

Ensure the Visibility of Latine Entrepreneurs
Seek out and promote Latine entrepreneurs for awards, opportunities, and additional capital.

For Latine Entrepreneurs: Know That You Belong!
You have so much to give to this space (and any space): you more than deserve these opportunities, so seek them out and you will succeed.

VH Latine Directory
Visible Hands is working to find more ways to support Latine entrepreneurs. We’ve created an ever-growing Latine directory for entrepreneurs to share their information, and for us to share with other larger directories in our community. If you’d like to be added to this directory, fill out this form here. Want to see who all is on our directory? View it here.

References

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Turner-Trujillo, E., Del Toro, M., and Ramos, A. “An Overview of Latino and Latin American Identity.” the iris: Behind the Scenes at the Getty. Published September 13, 2017. https://blogs.getty.edu/iris/an-overview-of-latino-and-latin-american-identity/.
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