Did you know that Latinos are not only a large and fast-growing segment of the U.S. population but also a driving force behind economic growth, despite facing unique challenges? Recognizing the immense opportunity this group represents for the U.S. economy, Stanford Professor Emeritus Jerry I. Porras and several alumni of the university created the Latino Business Action Network (LBAN), an independent Silicon Valley-based nonprofit to empower Latino entrepreneurship across the U.S. Early on, LBAN established a collaboration with Stanford University named the Stanford Latino Entrepreneurship Initiative (SLEI).  

Through SLEI, LBAN and Stanford perform the most extensive research on U.S.-based Latino business owners. This research shows that Latino entrepreneurs are creating new companies at an accelerated pace and fueling faster job creation. Interestingly, this research found that jobs at Latino-owned companies offered better benefits. This Latino entrepreneurial spirit is already impacting the nation’s economic landscape, generating over $800B annually and growing.

However, education plays a pivotal role in advancing the Latino community. Over the past few decades, there has been exponential growth in Latino enrollment in postsecondary institutions in the United States, demonstrating a strong commitment to higher education and personal development. From 2000 to 2020, Latino enrollment at four-year institutions skyrocketed by an astounding 287%. LBAN intrinsically recognizes the transformative power of education and leverages it as a cornerstone of its initiatives. LBAN created a Business Scaling Program at Stanford focused on empowering Latinx-owned businesses through tailored education, mentorship, and networking opportunities. Participants gain the tools and knowledge necessary to scale their businesses effectively. The program specifically addresses the unique challenges faced by Latino entrepreneurs, including access to capital, and strives to foster long-term growth and success.

One of the three main pillars of LBAN is an empowering ecosystem. Recognizing the importance of fostering a supportive environment for Latino entrepreneurs, LBAN actively works to build national networks of Latino-friendly capital providers, corporations, mentors, and supporters. This ecosystem provides Latino entrepreneurs with access to vital resources such as funding, strategic partnerships, mentorship, and guidance. LBAN’s business scaling program at Stanford has already empowered over 1,080 Latinx-owned businesses from across the country.

As LBAN alumna Marissa Hardin mentions, “Building and scaling a business is a mix of highs and lows, and you will constantly be looking for support and resources to help you progress. You need a network that is willing to help, no matter what. The stronger your network, the faster you will move through the tough times.” The power of a supportive network cannot be underestimated. For many Latinos, participating in this Business Scaling program at Stanford means being in a room full of around 75 Latina and Latino entrepreneurs who share similar challenges and backgrounds. It’s a transformative experience for participants, who find  solidarity and strength in a community that understands their journey, as well as gaining unparalleled knowledge and resources. LBAN’s mantra, “Do business with each other and get business for each other,” captures the essence of this mutually supportive ecosystem.

It is important to create these types of networks for Latina and Latino business owners, as LBAN’s SLEI research shows the key  challenges that Latino-owned businesses face when accessing capital. For example, they receive less than 2% of the available Venture Capital funding in the U.S., and their odds of loan approval from national banks are 60% lower than non-Latino-owned businesses. Another big challenge is accessing contracts: LBAN’s SLEI research shows that Latino-owned businesses secure corporate contracts that are 3.3 times smaller on average than white-owned businesses (WOBs), and state and federal government contracts that are more than 30 times smaller than WOBs. Additionally, the procurement period for government contracts takes more than a year for 37% of Latino-owned businesses. This sharply contrasts with the more than a third of white-owned businesses that obtain government contracts in less than six months. 

LBAN’s research with Stanford enables policymakers, business leaders, and investors to make informed decisions that foster an inclusive business environment. With eight years of foundational research, the objective of LBAN’s SLEI research is gain insight into the state of Latino entrepreneurship nationwide. Every year SLEI researchers  collect data from thousands of business owners and leverage large datasets to synthesize trends, thus shaping research in this field. They release their findings in an annual research report titled “State of Latino Entrepreneurship,” and host a State of Latino Entrepreneurship Forum at Stanford University every year, open to everyone. This event offers a wealth of data-driven insights, valuable networking opportunities, engaging panels with experiences from Latina and Latino entrepreneurs, and meaningful connections.

LBAN partners with other organizations similarly interested in expanding  knowledge related to Latino entrepreneurship and the Latino economic impact on the U.S. economy. In addition, they engage academic scholars through annual conventions to foster a more extensive network of interdisciplinary scholarship and enhance the visibility of this research and its impact. The larger goal of their research program is to make a positive impact on economic development of the Latino community and the country’s overall prosperity.

Through its collaborative efforts, LBAN leverages foundational research, transformative education, and an empowering ecosystem to unlock the full potential of Latino entrepreneurs. By providing a platform for their voices to be heard and their businesses to thrive, LBAN and SLEI are creating a more inclusive and prosperous future for the Latino community and America overall.

SLEI research is available to the public at www.lban.us/research  

About the Author:

Arturo Cázares is the CEO of LBAN, a Silicon Valley-based non-profit that partners with Stanford to empower Latino entrepreneurship across the U.S. With his leadership, LBAN has become a thought leader in Latino entrepreneurship. Before LBAN, Cázares was a C-level executive with extensive experience scaling businesses, from building and leading teams at start-ups to leading multi-billion-dollar revenue organizations with thousands of employees worldwide. He has an Electrical Engineering degree from Stanford and an MBA from the Stanford GSB.