Despite diversity pledges, funding to Latino-founded startups in the US still lags—accounting for only 2 percent of venture investments last year.
shows that US startups with a Latino founder received just 2.1 percent of venture capital funding in 2021. That’s slightly up from 1.8 percent in 2018. Latinos’ share of early-stage funding, which can be the most critical for underrepresented startups, has slightly decreased since 2018., from Bain, looked at the top 500 venture capital and private equity deals in 2020. Fewer than 1 percent involved a Latino founder.
. But those programs haven’t fundamentally changed anything about the access or capital flowing to Latino founders, says Alejandro Guerrero, a partner at Act One Ventures and a member of LatinxVC, a group that advocates for Latinos working in venture capital. “The proof is in the data,” he says. “There just aren’t enough people investing in these communities.”
Guerrero believes that because VC deal flow relies on personal networks, many Latino entrepreneurs have a hard time even getting a first meeting. The Latin American founders who have raised huge rounds in the last year often “come from very privileged backgrounds, and are very well-educated,” he says. The founder of digital bank Nubank, the most valuable private startup in Latin America, went to Stanford.
While it's important to see greater representation of Latino founders, Guerrero says many of these investments reinforce the idea that VC funding is only for people who are already rich, educated, and well-connected. “There’s this sense that someone may be a different color than you, but they went to the same school,” he says.