The number of Latinx startups is rocketing. Their funding is not. And the U.S. economy suffers

Unless we solve the “scaling gap,” we’re missing out on the opportunity to grow employment and GDP.

- Por Guadalupe Gonzaáez

Latinx entrepreneurs have been starting companies at a record clip. From 2009 to 2019, a 34 percent increase in startups by these founders has made them the fastest-growing startup demographic, by a long shot. The number of startups by white entrepreneurs, by comparison, has decreased 6 percent.

So it would be reasonable to believe that Latinx employers—who are concentrated in growth industries such as transportation, construction, and leisure and hospitality—would also be enjoying funding and sales growth in the same proportion. But they aren’t, and that’s both a mystery and a shame. Only 3 percent of these founders have reached the $1 million mark in annual sales, according to the Stanford Latino Entrepreneurship Initiative (SLEI), part of the Graduate School of Business. That’s just a third of the numbers for the non-Latinxowned businesses, an extraordinary gap.