There’s a funding gap for minority start-ups in the U.S. — and one Hispanic executive is hoping to change that.
Marcelo De Santis is President of Angeles Investors, a firm set up in 2020 to find, fund and grow Hispanic and Latinx ventures.
“Only 2% of the minority-owned businesses are funded by venture capital firms, and that's the reason Angeles Investors exists ... to close that gap, provide opportunities to these Latinx and Hispanic founders,” De Santis told Yahoo Finance Presidents: Hispanic Stars.
“It's also to build an ecosystem, because we want to help to scale up the companies owned by Hispanics and Latinx, but on the other side, bring more investors, Hispanic and Latinx investors, into the ecosystem,” said De Santis. “So we are building on one side the capital availability and on the other side the strength of the founders.”
One of the reasons more funding doesn’t go towards minority start-ups may have to do the with the general lack of diversity at most vc firms.
“I think when you look at venture capital firms and their teams, you know, the diversity in the leadership team of those venture capital firms is not, I would say, what we would like to see, So as a result of that, also, there is a lot of bias as we look and evaluate companies,” said De Santis.
Hispanics also need to collaborate more together, he said.
“I think specifically the Hispanic and Latino community, we need to be better at helping each other and actually getting together, building these alliances, helping each other with funding, with resources, education,” he added.
Advice to entrepreneurs
De Santis has is a veteran of the digital transformation of businesses. He is currently executive advisor of Thoughtworks, a software consultancy company. De Sanits is former chief information officer of Mondelez (MDLZ) and Group CIO of Pirelli (PIRC.MI). Over the years he has dedicated time and resources to mentoring entrepreneurs.
De Santis has a list of pointers for entrepreneurs looking to make it big with their start-ups.
Knowing one’s strengths and weaknesses is essential, he said.
“If you are going to get into entrepreneurship, make sure that you know what you're getting into, right? I mean, it's a risky game, “ said De Santis. “This is about knowing what you can do and do well and knowing what you cannot do and ask for help.”
He also says entrepreneurs need to be very clear about what problem they are trying to solve with their business.
“You have no idea how many times I am in pitch competitions or presentations and it takes like five or seven minutes for me to understand what is the problem the entrepreneur is trying to solve. And that puts off many, many investors very early in the pitch presentation,” said De Santis.
Lastly, especially during COVID times, taking time to re-energize is crucial.
“It's very energy draining to deal with the stress of entrepreneurship, the economy, and our personal lives. So take time for, you know, take care of yourself. And also, when you take care of yourself, you will be able to take care of your business and your team and your customers,” he added.
Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre