After more than a decade working in the corporate world on the East Coast, Derek Smith returned home to a flourishing tech scene that largely excluded people like him.
"I realized that the incredible tech wave sweeping Los Angeles left behind communities from my neighborhoods growing up in South L.A." he said.
That inspired him to create the Urban Tech Connect (UTC) and Plug-In South LA. More than six years later, the Urban Tech Connect conference aimed at plugging African American, Latinx and other underrepresented communities into the greater tech ecosystem of founders, angel investors, venture capitalists, tech influencers and industry leaders is in its fourth year.
The event will run May 18 through May 20.
It came out of his other vision, Plug In South LA, a network of founders, funders and tech professionals in a part of L.A. that has been historically overlooked.
The conference aims to build that network, featuring panels led by investors discussing their latest projects, founders sharing how they made their ideas a reality, and top Black and Latino entrepreneurs advising on how to tap into knowledge and capital.
"I decided to prioritize creating a tech ecosystem for local young Black and Latinx people to gain awareness of all the potential pathways to create wealth, and be creators and owners, not just consumers," Smith said.
The pandemic has forced the conference to go virtual, but Smith believes this makes UTC all the more necessary.
"In a time when we're all exhausted staring at our computers all day, our workshops and learning sessions are opportunities to bring the community together," he said.
As part of the event, Los Angeles-based Snap Inc. will host a workshop on augmented reality and how to create your own lens.
Lidia Medina, 28-year-old investor at VamosVentures, said she's looking forward to hosting office hours titled "Uncovering New Opportunities in Venture Capital," where she hopes to provide investors and founders with guidance for how to break into the space.
"I'm really excited for UTC and the potential to make the space a little bit less fragmented," Medina said.
Suma Wealth CEO Beatriz Acevedo is one of the conference's keynote speakers. Her "master class" is titled "How I Raised a $1 Million Pre-Seed Round."
"I'm excited to see peers in la lucha," she said referring to the Spanish phrase often used to describe the grind; "I'm hoping to inspire other founders starting out and hoping to be inspired by founders more ahead in their journey."
Participants said the George Floyd protests last summer sparked a year of introspection on the lack of representation at the top of many of the country's most successful companies.
"We've made inroads towards ensuring that underrepresented people have a seat at the table," Smith said. "However, we still have a long way to go to make the American Dream a reality for those not privileged with the information or capital."
VamosVentures investor Lidia Medina agrees that there's been a greater effort towards funding diverse founders and tech companies.
"At VamosVentures, which is a fund aimed at supporting diverse Latinx entrepreneurs, we doubled the amount raised over the last three years in the first three months of 2021, raising $25 million," said Medina. "It's not a coincidence, but rather has to do with the current culture."
Each day offers either a workshop or office hours aimed at giving young entrepreneurs and tech professionals practical steps for getting ahead. Tickets range from $25 for general admission to $100 for full access to panels and all workshops, office hours and networking sessions. Attendees can also get a $50 ticket for access to just panels and office hours.
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With Help from Apple and Bank of America, VamosVentures Doubles Down on Backing Latinx Founders
After closing its first fund in December with $25 million in dry powder, VamosVentures, which bills itself as the first Latinx-owned venture fund to focus on Latinx and other diverse founders, decided it could stretch its ambitions.
Companies like Apple and Bank of America were knocking on the door, and VamosVentures decided it might as well capitalize on the increasing desire of corporate America to show they cared about diversity as well as a loosening of regulations that made it easier for banks to invest in venture funds.
"We had a good group of folks that didn't make the deadline," said Marcos Gonzalez, founder and managing partner of VamosVentures, who has previously been an angel investor and worked in private equity. "A couple new LPs showed up that were really motivated to do something in the DEI [diversity, equity, and inclusion] space and certainly the social justice space."
The fund plans to focus on health and wellness, future of work, consumer packaged goods and financial technology startups.
With the additional checks – which also come from Twitter, the Ford Foundation and the global alternative asset firm TPG, VamosVenture announced this week it has doubled its fund to $50 million. The new investors join PayPal, which signed on last year.
Rather than back more startups, the additional capital will mostly be used to write bigger checks of between $250,000 and $1 million.
"We will be able to take larger ownership positions," Gonzalez said, adding that he will also be able to hire more staff.
Just 2% of VC investment partners in L.A. identify as African American or Latino, according to PledgeLA. Nationally, a 2018 Deloitte study found 80% of investment partners at U.S. venture firms were white and only 3% were Black and 3% Latino.
Gonzalez said he is pleased to see companies like Apple recognizing the value of diversity and promoting more non-white managers.
"When I started this five years ago, there weren't that many. Now you run into one every week," he said. "There's been a lot more momentum around diversity."
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Vamos Ventures' Marcos Gonzalez on Investing in Latino and Under-represented Founders in LA
On this week's episode of LA Venture, hear from Marcos Gonzalez, the managing partner at VamosVentures, a seed-stage venture fund which invests in Latino and diverse founders. Over half of L.A. County is Latino. A relatively new fund, investments are in the range of $100,000 to $500,000. Seems like a great time to be investing in this community! And, Vamos is hiring...
Key Takeaways:
- Each month, 80,000 Latinos turn 18, which is driven by 92% domestic growth -- not due to immigration. VamosVentures is looking at opportunities within that demographic, with a special interest in consumer packaged goods as well as financial services, health and wellness, retail broadly and media.
- Venture capital versus private equity can lead to investors getting carried away with the latest fad idea. VC that focuses on early-stage companies can learn from private equity to be more circumspect and carefully evaluate the young company at hand.
- VamosVentures says "no" to prospects with a thoughtful four-prong approach. Ultimately, the door is always open.
Every year the number of Hispanics receiving STEM related degrees is doubling. A lot of these young folks with STEM degrees are going to be getting into the engineering world and innovation and entrepreneurial world. That's a great indicator of future.
— Marcos C. Gonzalez
Marcos C. Gonzalez is founder and managing partner of VamosVentures. Marcos is a private equity, venture and angel investor, who has invested in the U.S. and abroad. In between investment funds, Marcos co-founded a tech company in Boston during the first internet wave of the 90s. Before tech entrepreneurship and investing, Marcos worked for the Boston Consulting Group. Marcos graduated from Brown and Harvard Business School.
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