Empowering Her
Why startup culture can’t leave half the Hispanic population behind
The line of entrepreneurs, more than 100 strong, snakes out the dining hall and into the conference room at Miami Dade College’s Wolfson campus in downtown Miami. On the other side of the sliding partition, about 15 funders representing millions of dollars in potential capital are stationed at small standing tabletops. What sets this crowd apart from every other startup conference from South Florida to Silicon Valley? Here, almost every pitch is being tossed in Spanish, and there isn’t a Y chromosome to be found in the lot.
The fund-hunters file in for a session of speed-dating style Q&A. In 60 seconds, investors try to get to the heart of the myriad business proposals. No time for pleasantries—what do you do, why can you do it best, how much will it cost and how much will I make in return? Then the bell rings, and it’s on to the next.
WeXchange, the conference that brought together these budding businesswomen from Latin America and the motivated venture capitalists they’re pitching, bills itself as the first such gathering. The conference satisfies a burgeoning need, connecting Latinas with great ideas and entrepreneurial spirit to the moneyed backers who can help them realize their dreams. Susana Garcia-Robles, a principal specialist from the Inter-American Development Bank’s Multilateral Investment Fund, coordinated the event, which was a culmination of more than a year of research conducted by IADB and Ernst & Young.
“What we found is that Latin American women entrepreneurs face unique challenges from their personal lives, social lives and within the business environment,” says Garcia-Robles, who is in charge of early stage financing and access to finance at the MIF/IADB. WeXchange was organized in collaboration with Argentina-based regional fund/accelerator Nxtp.Labs and Spanish funding platform Ellas2. In its first iteration, WeXchange drew a healthy crowd and some 20 sponsors and partners (including PODER).
“Latin American women entrepreneurs face unique challenges from their personal lives, social lives and within the business environment”
Back on the pitch floor, Ytzia Belausteguigoitia, a principal in the Mexico City offices of Venture Partners, dissects proposals from eager entrepreneurs. Agustina Sartori explains how her startup, AdviseMeTech, will help women virtually test beauty products.
“So do the women receive the products in the mail?” Belausteguigoitia asks. Sartori explains that her company has developed a platform to overlay the effects of the products onto the users’ selfies, eliminating the need for testers and costly shipping. Belausteguigoitia seems impressed, and asks what Sartori’s next steps would be.
Later, Belausteguigoitia explains her interview method. “I want to know where we come in; if they had the funding, what would they do with it?” she explains.
“You need to know the level to which they’ve advanced their project, and you need to know their level of expertise. We’re looking for people who are passion-forward, and it’s my job to get to know their industries and their capabilities within that industry. It depends on the entrepreneur, because I’m really betting on that person.”
Capitalizing
Belausteguigoitia and her fellow venture capitalists represent a solution to perhaps the most significant hurdle facing not just Latina entrepreneurs, but all startups: funding. Getting the seed money to bring an idea to market is a challenge unto itself. However, Latinas the world over face an especially steep climb.
An American Express OPEN Forum report in 2012 found that just 1.8 percent of all venture capital goes to Latina-owned businesses. A study by Oxford’s Saïd Business School posited that the overwhelming majority of Latina entrepreneurs operate so-called “lifestyle businesses,” such as catering companies, real estate agencies, fitness centers or corner stores. These small businesses are the lifeblood of an economy, to be sure, but they don’t exactly draw the big-money VCs.
This means that these entrepreneurs are largely shut out of potentially game-changing capitalization opportunities, according to Garcia-Robles. Loans from friends, family, or the local financial institutions can only take entrepreneurs so far. At some point, they have to scare up the means to scale up.
“One of the biggest stumbling blocks to women’s entrepreneurial growth is the lack of access to viable financing; that would enable them to conceive a broader vision of their businesses and allow them to grow from small-business owners to business owners,” says Angélica Fuentes Téllez, CEO and shareholder of Grupo Omnilife.
“They need money to make it happen,” says Garcia-Robles. Last year, MIF and Ernst & Young commissioned a study focusing on nine countries in Latin America. The groups provided training for Latina entrepreneurs and studied the effects it had on the success of their businesses. In Argentina, advisors used focus groups and surveys to study the reality faced by dynamic women entrepreneurs. In both cases, participants cited a lack of funding as the greatest impediment.
“We wanted to define the problem, explore the reasons, debunk the false reasons, and illuminate solutions,” Garcia-Robles says. Among the red herrings, she points to the stereotype that women are too meek to dominate business. “We’ve seen women operate more transactionally in business environments, while men are relational. Think of the example of golf. Men use this to build business relationships; women are largely absent.”
Male Dominated
Throughout Latin America and in the U.S., the startup business environment is far less conducive for women. Traditional gender roles are strong in Hispanic culture, and even within families led by bold matriarchs, expectations are that Latinas will handle the lion’s share of homemaking and childcare.
“What we found is there are a lot of barriers to entrepreneurial women, but that when we empower them, they can be just as successful and innovative,” says Bryan Pearce, Ernst & Young’s Americas Director. Pearce’s team oversaw the study that outlined the challenges faced by Latina entrepreneurs (the results of which can be seen in the adjacent graphic).
“The business environment is led by men. I’ve always been around men, and [conferences like] this are different because women understand the issues, about being a minority in a man’s world,” says Belausteguigoitia. “We understand what it’s like to be a juggler, with family, career, so on.”
Still, some believe that being a woman is more help than hindrance in the startup world. Of those surveyed in the MIF/EY study, 80 percent say they do not perceive discrimination for being a woman. Sartori, the AdviseMeTech founder, echoes that sentiment.
“There are a lot of organizations helping women today, and being a woman is more of an advantage than a disadvantage, I think. I don’t know how much longer that will last, so we need to strike now. Now’s the time to be a woman entrepreneur,” she contends.
“Now’s the time to be a woman entrepreneur.”
Gaining Traction
The idea that women might actually be as adept as men at starting businesses is gaining traction throughout the hemisphere. Two days before WeXchange, the Clinton Global Initiative Latin America conference was held in Rio de Janeiro, and Latina entrepreneurship was a hot topic. In advance, Grupo Omnilife’s Téllez wrote, “women in the region need support, along with training and education opportunities inside and outside the corporations, mentoring programs that take them into consideration as capable and successful leaders.”
Meanwhile, Hispanic women in the U.S. are outpacing their non-Hispanic counterparts in the realm of entrepreneurship, according to data published by the Federal Reserve. Hispanic women are most likely to start their own businesses—three to five times more likely—and those businesses boast greater revenues.
For the U.S., Latin American and Caribbean entrepreneurial Latina, globalization has helped. Most of the WeXchange crowd was born outside of the U.S., but that distinction is growing less and less relevant in an always-connect, transnational business environment. Whether North America, South America or Central America, these are all American entrepreneurs whose business interests extend from their hometowns to the states and beyond. Here they gather in Miami, a relatively short international flight from their home countries.
Sartori, whose home is Uruguay, understood this concept when she began developing her business. Coming from a smaller country, she set her sights on the U.S.
“We knew right away we were going to have to look beyond Uruguay. We are making a global brand, one we hope to bring to many markets,” she says. “But really, there’s never been a better time to do that than now.” •
Starting Something
These Latina entrepreneurs are bringing their concepts to market
- Angela Cois, Founder, LastRoom
Elevator pitch: The Mexican travel app helps you book spontaneous travel at cheap prices by tapping unsold inventory.
2. Fabiana Mersan, Owner, FabLab
Elevator pitch: Across different cultures, this marketing company helps you reach new and different constituencies.
3. Ana Hornstein, COO, Fotter
Elevator pitch: The online retailer offers free shipping on large orders and free exchanges up to 90 days.
4. Cecilia Calderon, Founder, Dentidesk
Elevator pitch: The easiest way to find the best dentist in your neck of the woods.
5. Sylvia Chebi, Co-founder, Greentizen
Elevator pitch: Promoting environmentally friendly products through social media to change the world.
This article is in the Feb./Mar. 2014 issue of Poder Hispanic Magazine (@PoderMagazines). Check out our website, www.poder360.com.
