Sandy Rubinstein credits her parents' influence for her success.
"My family was blessed to immigrate to the U.S. from Chile, and my parents taught me that if I work hard, I can accomplish anything here," says the owner of the ad agency DXagency, which just celebrated its 15th anniversary. "Latinos raise their kids to know that failure is not an option. Hard work is part of who we are."
Thanks to a combination of hard work, determination and creativity, Latinx entrepreneurs like Rubinstein continue to increase in numbers.
According to the 2017 Kaufman Index Startup Activity report, which combined a sample size of "roughly 700,000 adults ages 20 to 64" over a 20-year period, "the share of all new Latinx entrepreneurs rose from 10 percent in 1996 to 24 percent in 2016."
Despite these big gains, being a Latinx business owner is not without its challenges, as the following entrepreneurs can attest. Here five Latinx business owners share the top hurdles they've had to jump over while starting and running successful businesses.
Access to Capital Often Difficult for Latinx Business Owners
"The challenge for Latinx business owners, especially in technology and the high-growth venture capital world, is we don't fit the standard model," says Manny Medina, CEO of Seattle-based Outreach, a sales management platform, and author of Sales Engagement: How The World's Fastest Growing Companies are Modernizing Sales Through Humanization at Scale.
Starting and running a business is difficult as Latinx business owners. Mentors can help you navigate the process to avoid delays and costly mistakes.
—Elizabeth Ortiz, co-owner and business development manager, Geek Powered Studios.
"VCs tend to work on the basis of pattern recognition," continues Medina. "Given that Latinx business owners don't fit the pattern, we have an additional hurdle in terms of becoming 'investment worthy.' Getting over this hump is really difficult and is often why it takes Latinx-run companies so long to raise capital."
Ezequiel Vázquez-Ger recently opened a Latin American restaurant called Seven Reasons in Washington D.C. He found raising capital for the restaurant to be his biggest challenge by far.
"When I signed the lease in June 2018, I thought raising the money would be easy, but I was wrong," says Vázquez-Ger. "Eighty percent of the financial commitments I had made fell through, leaving me having to start from scratch."
It took Vázquez-Ger more than five months and more than 180 meetings with potential investors, including investing $120,000 of his own money to maintain rent and other necessary expenses, to keep the project moving while he secured the funds.
"It paid off. We got the funding to build the space," says Vázquez-Ger. "Doing my homework, having a solid concept, a strong presentation, a bulletproof business plan, thorough knowledge of the numbers, projections and risks, was key when asking for money."
Difficulty Finding Ideal Brick-and-Mortar Locations
For Eduardo Silva, co-owner of Varona Hair Restoration with his spouse Christopher Varona, finding the ideal location for their practice was a challenge.
"In addition to being Latinx business owners, our company is LGBT-owned. Finding the right location was key in our eyes to attract the type of clients who might consider our services. But we had difficulty doing so," says Silva.
"We enlisted the assistance of a commercial real estate broker, but he abandoned us during our search, as he made the false assumption that we were not financially prepared or couldn't afford what he wanted to lease us," continues Silva. "We then interviewed several other brokers and found someone who really understood us and our goal and seemed to care."
Limiting Stereotypes of Latinx Business Owners
Perhaps one of the most troubling aspects of growing a company for Latinx business owners are pervasive stereotypes.
"I've had multiple investors, stakeholders and potential clients say to me in disbelief, 'You're Mexican?!'" says Adriana Herrera is founder and CEO and CTO of Stealth, a social good technology startup.
"Unfortunately, their only reference of a Latina is either someone who cleans their houses or the media image depicting Latinas as dumb and hot-headed," she says.
In response, Herrera created a method for mitigating and avoiding such negative interactions.
"I developed a formula to reframe any preconceived opinions of Latinas and Latinx business owners," she says. "For the first 10 minutes or so of a first-time meeting, I lower the tone of my voice, don't use inflection, use as few words as possible and only talk facts and numbers.
"After about 15 minutes, I crack a joke, smile and drop in a saying in Spanish," says Herrera. "After they respond by asking if I'm Mexican, I share more about my background, education, accomplishments and company. Doing this allows me to control/reframe pre-established stereotypes that might otherwise hinder my meeting objectives."
Access to Resources and Networks
For Elizabeth Ortiz and her husband Guillermo, access to networks of like-minded business owners and the resulting resources has been an especially pressing challenge they've had to face as Latinx business owners.
"Starting and running a business is difficult as Latinx business owners. Mentors can help you navigate the process to avoid delays and costly mistakes," says Elizabeth Ortiz, co-owner and business development manager of digital marketing agency Geek Powered Studios.
"We overcame this challenge by joining several networks of other entrepreneurs, such as the Greater Austin Hispanic Chamber of Commerce," says Ortiz.
"Through the chamber, we had the opportunity to gain access to resources that we didn't know existed," says Ortiz. "Our local chamber has been vital in our growth. We have received several referrals and have made key partnerships with other businesses."
Read more articles on raising capital.
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