Cisco and Cisco Investments recently hosted the inaugural Magnetic Aspire Summit. The virtual event marked the two-year milestone since Cisco Investments launched the Aspire Fund—an initial $50 million fund focused on financing and scaling diverse-led startups and VC funds.
Magnetic Aspire Summit showcased the diverse community the fund has built and visionary leaders the fund has backed. One of those leaders is Sol Trujillo, a former CEO of several major telecom giants and now partner and CEO at L’ATTITUDE and L’ATTITUDE Ventures, in which Cisco Investments originally invested in 2021. During a fireside chat with Derek Idemoto, SVP of Corporate Development and Cisco Investments, Trujillo shared why he’s committed to supporting the next generation of Hispanic/Latino leaders who are transforming the technology landscape.
Here are some key takeaways.
How will we achieve growth in the U.S. in the 21st century? It’s a question that Trujillo has thought about a great deal.
Of this he is certain: it will not be the same as in the 20th century, in large part because of digitization and demographic changes.
Digitization has changed everything in the 21st century, and the pandemic has only amplified its impact. In terms of demographics, the Hispanic/Latino population is a growth driver of the times.
But for the awakening Hispanic/Latino giant to reach its full potential, a key challenge must be addressed: lack of access to capital for Hispanic/Latino tech leaders and entrepreneurs.
To help tackle this problem, Trujillo launched L'ATTITUDE Ventures, a VC firm focused on investing in Hispanic/Latino-owned, early-stage companies with high-growth potential. The firm has raised $100 million to date (with help from Cisco).
“We're just trying to unclog the system,” says Trujillo.
Stifling growth
According to LDC's 2021 U.S. Hispanic/Latino GDP report, today’s Hispanic/Latino population makes up 20% of the U.S. population, has created nearly 80% of all net new business in the country, and created about 50% of all employer-founded businesses.
Yet despite this,Hispanic/Latino entrepreneurs are not afforded the same access to capital as some other groups. Citing a Stanford University study, Trujillo says Hispanic/Latino-owned businesses tend to top out at around $1 million in size due to this lack of funding.
If Hispanic/Latino-owned businesses achieved growth parity with Hispanic/Latino-owned businesses, he says, they could boost U.S. GDP to the tune of $1.3 trillion.
“We’re stifling the opportunity for further growth,” Trujillo says.
Smart business
For Trujillo, funding Hispanic/Latino-owned businesses isn’t just about promoting diversity (although he believes in that, too); it’s smart business.
And supporting Hispanic/Latino entrepreneurs is just part of the solution. Trujillo says Latinos can have a crucial impact in the boardroom and C-suite as well.
“They can think like the cohort, know the culture of their cohort, know the buying traits,” he says. “It's not just being nice. It's about business.”
Trujillo says companies should also consider diversifying their suppliers and their talent pipeline to include more Hispanic/Latinos.
In recent years, there’s been much talk about the tech talent in China, India, and Eastern Europe—talent that’s getting harder to hire as those markets develop an appetite for it themselves.
But he says there’s much less awareness of the large engineering talent pool south of the U.S. border, in Mexico and Latin America.
“We’ve never really looked to the south,” he says.
What you can do about it
So what should investors and VC funds do to take advantage of this opportunity?
Trujillo’s advice: change the way you source and engage Hispanic/Latino entrepreneurs. Get out of your comfort zone and start looking for companies and venture funds that are focused on this cohort.
And if you have the capital, create a fund yourself that's focused on Hispanic/Latino-owned businesses.
“The Latino cohort is part of the transformation of our economy, at least for the next 40 or 50 years,” he says.