Drive along stretches of major thoroughfares like Colfax Avenue and Federal Boulevard in the city of Denver and it’s easy to see how welcoming the city is to Latino entrepreneurs. Just look at the store signs.
“You constantly see new storefronts with Latino surnames—retail establishments, restaurants, bars, nightlife. They’re popping up all over the place,” said Greg Lopez, director of Colorado’s Small Business Administration. (Lopez resigned in mid-April).“I’m seeing more and more professional services that have Latino surnames in the company name, or a company name that has some type of Latin flair in its branding. That tells me the environment is very open to the Latino community. There’s no need to be cautious in exposing your heritage or culture.”
With a third of its 634,000 residents identifying as Hispanic, Denver has one of the highest percentages of Hispanic residents of any major city in the United States. This population mass has an enormous impact on Latino entrepreneurs, who can find in Denver not only a ready-made customer base, but also a deep roster of potential Latino business mentors and investors.
When Luis Colon moved to Denver in 1999, he only knew one person: the woman he was about to marry. But after working several years as a management consultant and serving on the board of directors of Denver’s Hispanic Chamber of Commerce, Colon was tapped in 2003 by newly elected Mayor John Hickenlooper—now governor of Colorado—to join his cabinet as head of the Department of General Services. In just four years, he went from newcomer to a major power player. That’s Denver.
“I don’t know how that would happen so quickly without the network you’d need in other cities to have the same type of opportunities,” said Colon, a native of Puerto Rico who moved to the mainland as a teen to study chemical engineering at Georgia Tech.
After he left government in 2007, Colon and his wife, Toti Cadavid, started a consulting firm called Xcelente Global, which helps companies develop brand and communication strategies to reach the Hispanic consumer in the U.S. and abroad. With five full-time employees and two part-timers, Xcelente has served such major clients as Western Union, AT&T Wireless, Hallmark and Visit Denver, the city’s tourism board.
“People here are not very focused on race,” Colon said of Colorado’s largest city. “The most important thing is to have a good solid plan and present it to the right people. I haven’t had any issues.”
Of course, as with any minority group, there are challenges that must be overcome. Annette Quintana, the chairman and co-founder of Istonish, an IT firm based in Denver, remembers having a conversation with a procurement manager at one company who told her, “We need a good minority company to work with.”
“I had to ask, ‘Did you have a bad experience?’ Most of the time something didn’t go right with someone they tried to work with in the past and it taints their expectations. You have to work to overcome that,” said Quintana. “You have to be better prepared, do your homework, do everything you can to over-deliver.”
Over the years, Quintana has taken that advice to heart. She started Istonish 24 years ago with her older sister Victoria. Last year, HispanicBusiness.com ranked Istonish number 336 in its national listing of top Hispanic businesses, with revenues of $8.6 million in 2012.
“On one hand you don’t want to be totally oblivious to these biases and challenges that exist out there, but you don’t want to go looking for them either because that doesn’t make your life any easier,” said Quintana, a Colorado native who learned the value of hard work as a little girl visiting her family’s ranch in the southwestern part of the state.
“People find it easier to do business with people who are similar to them,” Colon said. “The challenge is to make sure we break down what makes us different and focus on what makes us similar: You want to be successful; I want to be successful.”
From his perch as head of the Small Business Administration, Lopez said Latinos are often reluctant to ask for assistance.
“One of the biggest challenges is the strong sense of pride that oftentimes prevents someone from asking for help. It’s a cultural thing,” said Lopez, a native of Irving, Texas, who has lived in Colorado since 1988. “But, in essence, that’s how any business becomes successful — surrounding themselves with experts and colleagues that can give them the best practices or different approaches to how they can increase their market share, how they can manage their financials.
“The Hispanic community is two or three generations behind the Anglo-Saxon community in terms of the business fabric. We’re just starting to see those first-generation business owners who can pass on their knowledge and experience and wisdom to the second generation. We’re starting to see some wealth created, which is always important when trying to reach out to financial institutions and present collateral to secure funding,” he said.
Ah, securing funding. If minority entrepreneurs around the country could point to one hindrance to their businesses, inadequate access to capital would surely be near the top of the list. Latinos in Denver are no exception.
Though Colon said Denver has a significant number of venture capitalists willing to fund Latino startups and banks like Solera National that cater specifically to the Hispanic market, finding capital is still a problem. Without collateral and a good business plan, Latino entrepreneurs are going to have just as much difficulty getting funded in Denver as anywhere else.
“I often share with the small business community, if you are unable to get capital from financial institutions, it’s primarily because you can’t show you can pay it back,” Lopez said. “They have to make sure when they give out a loan that they are doing the best they can to make sure the loan will be repaid. Oftentimes the Hispanic community is not recognizing that relationship, that banks are for-profit institutions.”
One mission of the SBA is to create programs to help entrepreneurs get a running start. While Lopez said Colorado’s SBA doesn’t have any programs specifically geared toward Latino entrepreneurs, it does partner with outside groups to fill that niche.
In the early years of building Istonish, Annette and Victoria Quintana worked with one of those groups, a nonprofit called Mi Casa Resource Center for Women, where they were linked with female mentors who proved to be hugely important. Now the Quintana sisters are mentors themselves. Annette said it’s their way of giving back.
In Lopez’s estimation, about 80 percent of the Latino businesses in Denver are “mom and pop” businesses — small retail establishments and service companies with no presence beyond the neighborhood or the city.
“And you have to remember that everyone has a different definition of what success is,” Lopez said. “When you talk to the small business owners that some would consider ‘mom and pop,’ they are very excited about what they are achieving and what they are able to provide to their families and their children because it is really 10 steps above what they ever thought they could achieve.”
Lopez says the remaining 20 percent are primarily medium-size companies on the verge of becoming much larger — businesses with multimillion-dollar contracts and a national presence, like Colon’s Xcelente Global and Quintana’s Istonish.
Anthony Montoya, a Denver-based entrepreneur who has run several multimillion-dollar businesses in the telecommunications space serving the Hispanic market — including Movida Cellular — said Denver doesn’t have the venture capital/private equity network to make it easy to raise significant capital for major startups.
But it’s also hard to find investors elsewhere, said Montoya, 49, who is raising capital as the CEO of a startup geared toward selling cable television to Spanish-speaking consumers that would be accessed over the Internet.
“With most of these (venture capital) firms, their mentality is, ‘The Hispanic population is large, but they’re all immigrants and they can’t afford to pay their bills, so that’s not a good business to be in’,” Montoya said. “You have to educate them quite a bit. There’s a lot of data out there (on the Hispanic market). It’s just a matter of getting the data in front of these folks and getting them to read it and understand it.”
But those are the fundraising challenges all entrepreneurs face, particularly minorities. Apart from that, Colon says, there isn’t a better place in the nation than Denver for Latinos to start a new business.
“Denver has one of the highest concentrations of entrepreneurial activity and funding in the nation, on a per capita basis,” he said. “From my experience, if you have an idea, you want to nurture it, roll it out and start your own business, this is a great place to do it, with great resources available to anyone.”