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Latino Daily News

Thursday June 16, 2011

Hispanic Entrepreneurship On the Rise

According to the latest Kauffmann Index of Entrepreneurial Activity, Hispanic start ups are on the rise, and they are also

Minority Entrepreneurship Research Highlights:

• Entrepreneurship is a widespread activity in the United States. Participation is as common as getting married or the birth of a baby. About 6.2 in every 100 U.S. adults 18 years and older are engaged in trying to start new firms

• Hispanic men are about 20 percent more likely than white men to be involved with a start-up, but the difference isn’t statistically significant. Hispanic men are about equally as likely to attempt to start a business as white women, but they are less likely to be participating in start-up activities than black women.

• Education significantly predicts nascent entrepreneurship, particularly for blacks and Hispanics. Approximately 26 of every 100 black men and 20 of every 100 Hispanic men with graduate education experience report efforts to start a new business. This compares to 10 of every 100 white men with graduate education experience.

• Where people live affects entrepreneurial activity. Urban context, a county-level measure of certain economic, demographic and educational factors, is associated with prevalence rates of nascent entrepreneurs. Prevalence rates are higher in more urban areas.

• The impact of urban context varies for whites, blacks and Hispanics. For white and black men and women, the tendency to initiate start-up efforts is greatest among those living in more urban contexts. But for Hispanic men and women, the highest levels of activity are among those in the least urban contexts.

• Venture capital investing in minority enterprises is very profitable. An analysis of 24 venture capital funds making 117 minority-oriented investments found the average investment per firm was $562,400; the average gross yield per firm was $1,623,900 generating an average net return of $1,061,500.

• Venture capital funds that focus their investment in minority enterprises do not concentrate heavily in high tech firms. Unlike the broader VC industry, funds focused on minority businesses support a more diverse range of industries.