Making Waves in Silicon Valley
Silicon Valley is the target as Latino leaders work to break the job barrier in the high-tech sector dominated by Ivy League whiz kids and wealthy angel investors.
A recent power lunch hosted by Latino Magazine Publisher Jorge Ferraez, Tony Lopez of Mass Mutual Financial Group in Palo Alto, Calif., and Frank Carbajal of Es Tiempo, was designed to discuss the challenges and solutions for getting more Latinos involved in the high-tech gold rush so endemic to Silicon Valley. More than 20 Latino leaders from a variety of industry sectors attended the roundtable session dubbed “How to Create Wealth in the Latino Community.”
In Silicon Valley tech companies, Latinos comprise a distinct minority, making up just 6 percent of employees versus 22 percent of employment in non-tech firms. Even more striking, Latinos are rare in the ranks of tech entrepreneurs and investors. Less than 1 percent of ventures backed startups with Latino founders, according to the Equal Employment Opportunity Commission.
Power lunch participants agreed that Latinos must make them-selves heard. And they must begin talking about their skills and accolades outside of the Hispanic community to garner attention and important networking contacts. Latinos also must encourage their children to major in STEM-related academic courses. But the most important mantra in the effort to build Latino success in business and Silicon Valley remains wealth creation, according to the power lunch attendees. Jerry Porras, a professor emeritus at Stanford University’s Graduate School of Business and chair of the Stanford Latino Entrepreneurship Initiative, told luncheon participants about a recent survey that found 70 per-cent of Latino business owners who report difficulty in accessing capital. In fact, research by Porras shows that traditional sources of funding – such as venture capital, angel investment, debt financing or business bank loans – are almost totally absent from Latino startup activity. Only 6.1 percent of Latino businesses sought commercial loans, while 2.4 percent investigated use of government loans to boost business development. Through Stanford’s Latino Entrepreneurship Initiative and the Latino Business Action Network, Porras has kept important tabs on Latino business activity. For example, of the 3.3 million Latino-operated businesses in the U.S., 90 percent are family-owned, employ seven to eight people and generate annual sales of $155,806. “We need to help make those companies grow and get bigger,’’ said Porras.
“If all Latino businesses averaged sales over $155,000, more than $1.38 trillion would be added to the U.S. economy,’’ according to research by Porras.
To that end, luncheon participants pointed out the need to develop more mentoring and sponsorship opportunities for emerging entrepreneurs. Lopez, a sales manager at Mass Mutual Financial Group and son of a famous California jockey and horse trainer, said it takes three to four years for a board member to feel comfortable before he or she can help others. And at present, the majority of C-suites are filled with insiders with extensive company experience. Only 3.2 percent of all directors and 2.9 percent of all executives were of Hispanic origin, a government survey of 219 Fortune 500 companies found.
“We need to learn how to tell our stories in a way that is both en-gaging and instructional,’’ said Lopez.
All attendees also agreed that Latinos are “self-doubters’’ and that everyone needs to exhibit more confidence in the workplace and talk more about entrepreneurial success. The raw material is certainly there. Between 2007 and 2012, the latest data available, studies show Latino-owned businesses grew 46.9 percent, compared with 0.7 percent for non-Latino businesses. And of all small business growth between the same years, the data show 87 percent of that growth came solely from Latino-owned businesses. “There would simply be scant small business growth in this country without the Latino business startups,’’ said Porras. “We need investment to create new and bigger opportunities for Latino startups — and for all of our budding innovators.”