Introducing Inicio Ventures

Inicio Ventures, a Hispanics in Philanthropy initiative, is joining our Latinx/Hispanic colleagues and allies across the investment, startup and social impact ecosystems to rapidly grow the participation and success rate of Latinx/Hispanic startup leaders and meet our mission to generate wealth and prosperity for the community.

Members of the Latinx/Hispanic community in the US have ~$7,000 in total wealth, 1/16th of the US average. This wealth gap seems intractable and the pace of change feels negligible. While there are multiple historical and systemic root causes, one of the largest drivers is a lack of access to wealth-generating portions of the economy. This week the 7th annual State of the Latino Entrepreneurship report by LBAN/Stanford/Bain was published, where once again we are reminded that despite the deep entrepreneurial talent, the Latinx/Hispanic community’s constrained participation and support in the startup economy continues to box us out from the multi-trillion dollar economic engine. A shortcoming not only for an equitable chance of prosperity but a missed opportunity for innovation to benefit from Latinx/Hispanic ingenuity.

In defining our approach and setting goals, we considered several persistent baseline participation numbers:

Early-stage US Latinx-led startups and founders that receive(d) venture funding: between 1%-2%, which we estimate translates to 150–200 separate companies (based on average total # of Seed and Series A deals per year), and by experience, we believe, is about 200–350 Latinx/Hispanic founders.

Professional US Latinx/Hispanic venture investors: including the full spectrum of VC and Impact Investing, we project this is also between 1%-2%, or approximately 150–200 individuals, with about half (75–100) in senior decision making roles.

US Latinx/Hispanic Angel Investors: there is limited data on active angels, but using estimates by the SBA (250,000) & UNH’s Center for Venture Research (~335,000), and carrying over a similar 1%-2% range, there are likely 2,500–6,700 individual Latinx angels spread across the US with an undetermined velocity of deals and $ amount.

Latinx/Hispanic Employees of Early Stage Ventures: even less market transparency here, so #’s are more directional. As a proxy, we use the overall technology sector’s Latinx/Hispanic employee rate of 3%-8%, plus an estimate of 100,000–150,000 total early-stage employees, to project 5,000–7,500 Latinx/Hispanic employees across 11,000 venture-funded early-stage startups.

Latinx Wealth Generation from US Startup Economy: the economic value of the startups in the US is approximately $1.5 Trillion ($1 Trillion of which is affiliated with Bay Area investors). With limited data on the proportion of this going directly to the Latinx/Hispanic founders, employees, and communities, we are using a baseline of .5% to 2% range, which translates to $5 Billion to $20 Billion. (If you like numbers, if you spread that out to the US Latinx/Hispanic Population, that is $83 — $333 per individual).

Guided by data and in consideration of the strengths of Hispanics in Philanthropy and our associated network, we built Inicio Ventures to serve as an impact fund manager and startup leadership developer with a laser focus on growing the Latinx/Hispanic startup ecosystem. Using an impact investing framework and people-first mindset, we are leveraging both social sector resources and commercial support to grow several concurrent impact funds and programs:

  • Generation 1-Equity Fund: an evergreen fund that invests philanthropic capital under management into the equity of early-stage Latinx-led startups in order to achieve impact and economic returns. At exit, the financial upside is distributed back into the fund to be redeployed in future investments.
  • Launchpad: through this grant-giving fund, we provide non-dilutive cash awards to the winners of our Latinx Launchpad pitch competition series.
  • Venture Fellowsthrough a paid internship model, we provide cohorts of graduate-level students interested in venture investing and startup operations with experience-enhanced professional development.
  • Field Bridging: to help grow the Latinx startup ecosystem we are collaborating, leading, participating, and funding field-building/bridging activities.

In the last six months, we’ve successfully launched these funds and programs with encouraging results:

  • Total # of Investments: Generation 1 = 6, Launchpad = 7
  • Total # of Venture Fellows: Cohort 1= 4
  • Current # of Startup Leaders in our Portfolios: Founders & Fellows = 25
  • Latinx Job Creation: Potential Jobs= ~2,000
  • Latinx Wealth Generation: Potential Wealth= ~$1.5 B

In 2022, it is our intention to grow our People Portfolio to over 100 startup leaders.

At the end of this post, we’ve included many of the Latinx-led startups, Founders, and Venture Fellows that we have invested in and are excited to advocate for and amplify their stories.

Central to our approach is sharing our knowledge and collaborating with the full startup sector and our Latinx/Hispanic venture investors, founders, and influencer peers. We have already developed and implemented several unique investing processes and tools that we plan to evaluate for efficacy and hope to ultimately disseminate for others to learn and improve upon.

If you are interested in collaborating and learning more, helping support through funding, volunteering (mentors/advisors), joining our team (we’re hiring), being considered for funding, and/or are participating in one of our leadership programs (Venture Fellows Cohort 2 is coming), please reach out.

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