August 25, 2016

Miami No. 2 for startup creation in Kauffman Index


By Nancy Dahlberg / [email protected]

If you registered a new business last year, you were in good company.

The Miami-Fort Lauderdale metropolitan area again landed near the top of the Kauffman Foundation’s 2016 Index of Startup Activity, which measures new business creation. For the second year in a row, Miami ranked No. 2 of the 40 largest metro areas studied, a report on state and metropolitan data released on Thursday showed.

For the annual ranking, Kauffman’s analysts parsed government data from 2015 to determine the rate of entrepreneurs opening businesses in any given month and whether they are starting businesses because of the market opportunity rather than out of necessity. They also measure density, or the number of newly created businesses that employ at least one person per 1,000 companies. To hold on to its No. 2 ranking, Miami ticked up in opportunity share and down in both rate of new entrepreneurs and density since the year earlier; Miami’s density was second-highest in the nation. Kauffman’s index was significantly enhanced and expanded last year, but over the past decade the immigrant-rich Miami area typically has ranked in the top five nationally for new business creation in Kauffman’s research.

Before uncorking the champagne, know that the index itself is limited in what it shows. Miami may spawn a lot of companies, but how many of them grow? To measure that, Kauffman released its first annual Growth Entrepreneurship Index in June, which measured the rate of growth in companies’ first five years, the share of scale-ups that reached at least 50 employees by year 10, and high-growth company density, or the number of private businesses with at least $2 million in annual revenue and three consecutive years of 20 percent annual revenue growth. The results of the growth index for Miami were sobering: Instead of second from the top, the area ranked second from the bottom for growth among the 40 biggest metro areas in that study.

In the 2016 Kauffman Index: Startup Activity released Thursday, Austin, Texas, again ranked No 1. Following Miami at No. 2 were Los Angeles, San Francisco, Las Vegas, New York, Houston, San Jose, Denver and Phoenix. Kauffman’s data is industry-agnostic, so the businesses created range from high-growth tech startups to mom-and-pop shops and eateries and small service businesses in all industries. The Kauffman Foundation, based in Kansas City, develops and funds global research and programs in entrepreneurship.

Nationally, the key finding was that new-business activity was up for the second year in a row, said Arnobio Morelix, research analyst at the Kauffman Foundation and one of the study’s authors. “We as a country had reached the lowest level in two decades two years ago, so this second-year increase is very encouraging,” he said.

What’s driving this bounce-back? “We are seeing a return of opportunity entrepreneurship in the U.S., and that means businesses turning to entrepreneurship out of opportunity rather that necessity,” he said. The share of opportunity entrepreneurship was 84 percent, up 10 percent from the low during the recession. In Miami, the opportunity share was 78 percent.

Also nationally, Kauffman saw a narrowing of the gender gap, “but it’s still too large,” Morelix said. Females starting new businesses were 40 percent of the total in the 2016 index. More minorities are also joining the entrepreneurship ranks, and four out of every 10 entrepreneurs were minorities in this year’s index.

As for state trends, Florida ranked seventh overall but second among the 25 largest states (Texas was first). Orlando ranked 21st, up from No. 33 a year ago and one of the fastest-growing cities for startup activity. Tampa Bay ranked 19th and Jacksonville ranked 28th.

In addition to the Startup Activity and Growth Entrepreneurship indexes, Kauffman also releases a Main Street Entrepreneurship Index. In that 2015 index released in December, the Miami-Fort Lauderdale metropolitan area ranked No. 6 in the nation for small business activity, but the report also showed the region’s businesses are getting smaller, and nearly two-thirds have fewer than five employees. Together, the three annual reports aim to give a picture of entrepreneurship creation, makeup and growth in the United States.

The new report, as well as the other indexes, are available at

Nancy Dahlberg: @ndahlberg

Read more: Miami No. 2 for startups – but rides in second to last for scaleups

Read more: Miami area ranks No. 6 in nation for small business activity

August 17, 2016

125 South Florida companies make 2016 Inc. 5000 list

The 2016 Inc. 5000 list of fastest growing private companies includes 125 South Florida companies. The list, released on Wednesday, ranks companies by revenue growth between 2012 and 2015.

Tribeca Marketing Group in the education sector, with 8,395 percent revenue growth over the three-year period, clocked in at No. 20; the Hollywood-based company was the highest Florida company on the list. No. 27 was healthcare company Blackstone Labs of Boca Raton, with 7,546 percent growth. Fitness player Orangetheory of Fort Lauderdale was No. 60 with 4,308 percent growth. Rounding out South Florida players in the top 100 was Deerfield based Solar Media Team, with 3,428 percent growth.

Other South Florida companies in the top 500 were Herman Integration Services (100); the K Company Realty (116); Engage PEO (127), Greenlight Staffing Group (157), Florida Premier Realty of the Palm Beaches (170), Florida Solar One (261), Nearpod (297). WebME Technologies (298), Rafael Marrero and Co. (350), The Retail Outsource (376), (388), (398), Fresh Meal Plan (490), SoBe Promos (448) and Ultimate Jet Vacations (465).

Last year, 139 South Florida firms made the 5000 list. To see the full list of Inc. 5000 companies, go to

To see the full list of South Florida companies, go here.

July 15, 2016

Uber, Snapchat drive national venture capital higher in Q2; Florida funding plunges

Money (1)

By Nancy Dahlberg / [email protected]

While mega-investments in Uber and Snapchat drove venture capital higher in the second quarter, it was back to reality for Florida.

According to a new report released Friday, 20 Florida companies attracted $100.6 million in 20 deals in the second quarter, plunging from $855.1 million in the first quarter dominated by Magic Leap’s $793.5 million round from Chinese e-commerce giant Alibaba Group and other investors. The second quarter total was also down 51 percent from a year ago, when 18 Florida companies took in $152 million of venture funding. The top deal in the second quarter was Reliaquest, an IT security company from Tampa, which received $30 million in funding, according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association released on Friday.

South Florida companies receiving the most funding in the second quarter were electronic health records software provider CareCloud of Miami, $15 million; education-technology software startup Nearpod of Hallandale, $9.2 million; digital freight services provider iContainers of Miami, $6.7 million; and cloud-based software company Applicor Technologies of Boca Raton, $2.4 million. Other local companies receiving funding included ClassWallet, Videoo, Orthosensor and Kairos. In all, South Florida companies attracted $39.5 million in the second quarter, according to MoneyTree, based on Thomson Reuters data.

Nationally, Venture capitalists invested $15.3 billion in 961 deals in the second quarter, according to MoneyTree. Ride-hailing company Uber attracted $3.5 billion, and messaging company Snapchat received more than $1.7 billion, together attracting 31 percent of the total.

Total venture dollars deployed to startup companies for the quarter increased 20 percent and total deal count was down 5 percent, compared with the first quarter when $12.7 billion was invested in 1,011 deals. Compared with the second quarter of 2015, dollars and deals are down 12 and 22 percent, respectively, While mega-investments in Uber and Snapchat drove venture capital higher in the second quarter, It was back to reality for Florida.

Florida drew just two-thirds of 1 percent of the national venture capital total in the second quarter, the lowest total since 2012. The state typically draws less than 1 percent, but in the first quarter, because of Plantation-based Magic Leap’s mega-round, the state was on the venture map, drawing 7 percent of the national pie. In 2015, the state attracted $459.6 million.

Nancy Dahlberg: @ndahlberg

July 10, 2016

Entrepreneurship Datebook: Workshops, events this week.

Tech eggStartup Grind: The monthly speaker interview and networking event hosts Ian Lucey of the Lucey Fund for a fireside chat on funding and software development, 6-9 p.m. Tuesday, July 12, 360Spaces, 220 NW 27th St., Wynwood. More info:

Brainfood: Monthly speaker series will feature serial entrepreneur and author Felecia Hacker of Code Fever, 6:30-8:30 p.m. Tuesday, July 12, The LAB Miami, 400 NW 26th St. More info:

Venture Law Project: Learn about intellectual property guidelines for your startup at a consulting session between 8:30 a.m.and 12:30 p.m. Thursday, July 14, Dade Legal Aid, 123 NW First Ave., Miami. Cost: $15. More info on Eventbrite.

South Florida Technology Association: Theme of networking event is the internet of beers, featuring several local breweries, 5:30-9 p.m. Thursday, July 14, FAU Tech Runway, 901 NW 35th St., Boca Raton. More info:

Venture Law Project: Schedule a consultation with a business law attorney, between 8:30 a.m. and 12:30 p.m. Friday, July 15 Dade Legal Aid, 123 NW First Ave., Miami. Cost: $15. More info on Eventbrite.

Social Tech Live: Interested in social media, technology and business in the Miami community? Join Social Tech Live, a two-day conference featuring more than 50 speakers and an Innovation Challenge, 9 a.m. to 6 p.m. Saturday and Sunday, July 16-17, College of Business Complex at Florida International University. Tickets: (use the discount code FIUSMA for 35 percent off. More info:

Have an entrepreneurship-related event you would like considered for the datebook? Email ndahlberg@miami" and put datebook in the subject line.


Keep up with startup news and community views on the Starting Gate blog on

Nancy Dahlberg: @ndahlberg



June 23, 2016

3 South Florida companies make Forbes’ list of innovative growth companies

South Florida companies Ultimate Software in Weston, Mednax in Sunrise and Opko Health of Miami made Forbes' 2016 list of the 100 "Most Innovative Growth Companies" in the world.

Ultimate Software, which provides software for human resources, ranked No. 8; Opko Health, a pharmaceutical company ranked No. 21; and Mednax, a national physician network, came in at No. 65.

For Ultimate Software, it was the third year in a row ranking in the top 10; Ultimate ranked 7th in 2015 and 8th in 2014. “We remain focused on innovation and growth, consistently investing approximately 20 percent of our annual revenue in research and development and are committed to creating a culture that encourages new ideas,” said Scott Scherr, Ultimate Software’s CEO, president, and founder, in a statement.

To make the list, companies with seven years of public financial data and a total market value of $2 billion to $10 billion were ranked by a formula that includes the company's income and anticipated growth.  No. 1 on the list: Rightmove, a London-based residential and commercial property company.

To see the full list, go here.

Read more about Ultimate Software here. To see a Sun Sentinel slide show of Ultimate Software’s new building, go here.

June 15, 2016

Traffic woes, income gap threaten Miami’s emergence as global city

By Nancy Dahlberg / [email protected]

With 5.8 million residents and an economic output of more than $300 billion, the Greater Miami regional economy is one of the largest in the world, comparable to Singapore or Hong Kong.

Urbanism expert Richard Florida said he doesn’t think people realize just how big and economically powerful the region is. “Miami still thinks of itself as a tourism economy, a hospitality economy, a real estate economy; it doesn’t see itself as a global city,” said Florida, director of the Martin Prosperity Institute at the University of Toronto and Visiting Fellow of the FIU-Miami Creative City Initiative.

Florida and his Creative Class Group have authored a study on the current state of the economy with Florida International University, which will be released during Thursday’s morning session of the Greater Miami Chamber of Commerce 2016 Goals Conference, the organization’s annual two-day planning retreat being held at the Hilton Downtown Miami.

The 34-page study, titled “Miami’s Great Inflection: Toward Shared Prosperity as a Creative and Inclusive City,” is a data-driven analysis of Miami’s economy and talent base, as well as the results of several focus groups with local business leaders; it is designed to spur conversation and strategic thinking, Florida said. For the report, a first step in a multiyear study, researchers examined Miami’s economic progress and studied the divides and challenges it faces.

“Miami has almost become a global city by accident, without a plan,” said Florida, who lives in South Florida part time. “The point of the report is that it is time for a plan now. We need to think about this region as a region ... and act collectively with Broward and Palm Beach.”

Indeed, Miami has reached a crisis of its own success, Florida said, citing traffic woes (12th-worst in the country) and housing affordability, which must be addressed to be a truly great city, he said. Furthermore, Greater Miami is one of the nation’s most unequal and segregated metros, with a level of income inequality on par with Nicaragua or Zimbabwe, and ranking seventh in the nation for income inequality, the report said.

Yet, significant challenges present opportunities, and the report made recommendations, including leveraging the region’s role as a globalization hub, including port and airport improvements; upgrading the region’s service sector with suggestions for higher-wage occupational categories to focus on growing; broadening the thriving creative economy, which combines arts, fashion, music and media; and capitalizing on the “brain circulation” from Miami’s hub of college students who tend to stay. The metropolitan area ranks 8th in the nation for college students per capita and has a 67 percent retention rate of graduates, ranking 16th.

The report also recommended deepening the region’s growing startup ecosystem, and noted that there’s work to do, with Miami ranking 101 out of the nation’s 250-plus metros in its Technology Index. It also placed 148th out of 200 metros on the Milken Institute’s High Tech Index, and MIT and the Kauffman Foundation studies unveiled data showing substantial difficulties with scaling companies. However, Florida’s report noted that the region’s projected rate of growth for high tech jobs is a substantial 15 percent.

Among the recommendations, Florida said the Miami region, which is already rich in urban neighborhoods that attract and nurture startup energy, should do more to leverage its other creative economy strengths beyond technology — including arts, culture, fashion, music, design, media, entertainment and food. Read the study here.

“It is clear from this study and others that we have done at FIU, that as a community we have challenges but also golden opportunities to shape our future,” said FIU President and Greater Miami Chamber Chairman Mark B. Rosenberg. “We must harness the entrepreneurial energy in South Florida into ventures that will lead to jobs and wealth accumulation.”

Florida said in future years, the study team will likely do a deeper dive into key aspects of the creative knowledge economy and also upgrading the service economy, as well as Miami’s role as a global city and its connections with Latin America, the Caribbean, Europe and Asia.

Florida’s presentation on the report and a panel discussion takes place Thursday morning. Other topics that will be part of the Goals Conference are Cuba, sea level rise, transportation, Asia ties and cybersecurity.

June 02, 2016

Miami No. 2 for startups -- but rides in 2nd to last for scale-ups



By Nancy Dahlberg / [email protected]

Miami is a hotbed for startups. Problem is, few of them grow up.

That was the conclusion of a Kauffman Foundation study and ranking released Thursday that showed that the Miami-Fort Lauderdale metro area ranked second from the bottom out of 40 metro areas in growth of so-called scale-ups, or fast-growing companies. This comes a year after Miami ranked No. 2 in the nation for startup creation and six months after ranking No. 6 in the nation for small business activity.

The new 2016 Kauffman Index of Growth Entrepreneurship used data on employment and revenues to rank states and metro areas on the rate of startup growth in first five years, the share of scaleups that have reached at least 50 employees by year 10, and high-growth company density, or the number of private businesses with at least $2 million in annual revenue and three consecutive years of 20 percent annual revenue growth. By contrast, the No. 1 ranked area, Washington, DC, performed three times higher than No. 39 Miami in every category. In Florida, Jacksonville (No. 23), Tampa (No. 26) and Orlando (No. 35) all ranked higher than Miami. Only Detroit ranked lower.

“Miami is a place that does very, very well on startup activity – a lot of people are becoming entrepreneurs and starting companies,” said Arnobio Morelix, senior research analyst and program officer in Research and Policy at Kauffman, which studies and supports entrepreneurship. “But when we look at how firms grow after they start, we don’t see Miami doing very well.”

The good news is that while some places have both low startup creation and low growth, Miami already has a good density of startup companies, said Morelix. “We just need to find out how to help those companies scale better,” he said.

He said there are four factors that play a key role in growth entrepreneurship: density (how close startups are to one another), connectivity (how connected they are to one another and to resources), fluidity (how effectively startups can assemble resources locally to grow, including money and talent) and diversity (including diversity of skill sets.) He said one thing communities can do is to look closely at connectivity. “What we often see are silos,” he said.

Florida ranked 24 out of the 25 largest states ranked for growth entrepreneurship, which included all industries. “High tech is not a prerequisite for high growth,” said Morelix. One bright spot in the Florida data: the state ranked in the top five for health entrepreneurship.

The study comes as Miami has been working to develop a robust entrepreneurial ecosystem. In the past 3 1/2 years the Knight Foundation has committed more than $20 million to more than 160 entrepreneurship projects and organizations in the city. Several several organizations focused on scaling up companies have recently expanded to Miami, including Goldman Sachs 10,000 Small Businesses, Endeavor and the WIN Lab for women-led companies.

The ranking did not include venture capital because Kauffman wanted to look at broader measures. Indeed, most growing companies never tap venture capital, Morelix said. Still, the Miami area has produced anemic results. Florida ranked 14th in the nation for venture capital in 2015, despite being the third largest in population. Typically, the metropolitan Miami area attracts less than 1 percent of the national venture capital pie. (See attached list for more recent reports)

Overall, the Kauffman Index of Growth Entrepreneurship found that U.S. entrepreneurial growth, while still in a long-term decline, is happening well beyond the typical entrepreneurial hubs. Following the national trend, business growth across industries and geographies edged upward in most states and metro areas; Miami’s growth inched up about half a percentage point over 2015, according to the index.

Most of the metro areas considered “usual suspects” for growth, including Austin, Boston, San Diego, San Francisco and San Jose, performed very well in the index. But top performers also included Washington, D.C.; Nashville, Tennessee; Columbus, Ohio; and other metros not typically noted for entrepreneurship. Nationally, entrepreneurial business growth rose for the third year in a row, indicating that business growth largely has recovered from the Great Recession slump.

“Growth entrepreneurship directly contributes to the economy through creating jobs, innovation and wealth,” said Morelix. “The fact that 39 states and 34 of the United States’ 40 largest metro areas experienced an increase in growth entrepreneurship holds promise for a return to economic vibrancy after the long-lasting impact of the Great Recession.”

Find the report at

Nancy Dahlberg; 305-376-3595; @ndahlberg

How is Miami, state doing in innovation?

A roundup of recent studies and reports:

Florida’s innovation engine sputtering, recent reports show

Miami No. 2 for startup activity, just behind Austin

Miami ranks 6th in small business index

It’s not all tech: Five industries with most growth potential in South Florida

Florida venture capital suffers in 2015

Tech talent in South Florida, making progress?

Prescription for economy: Healthcare startup energy

May 10, 2016

Raising money through a portal may be better route than crowdfunding

By Jason Stark

Jason starkWe know how difficult and time consuming capital raising is for a new startup, and South Florida is no exception.  It takes vital time from a founder’s schedule.  You of course should try the local investor groups like Endeavor, the Knight Foundation, AGP Miami, New World Angels and Tamiami Angels.  However, those efforts may not net you the vital funding you need.

What else can you do?  Give up?  Of course not.  In the glacial world of the securities laws, we now have CROWDFUNDING.  Well, that at least is the word on everyone’s mind.  I will help clarify distinction between Crowdfunding (which finally begins on May 16, 2016), and using Internet portals to raise through traditional accredited investor offerings.  You may find that you may be really interested in raising through an Internet portal, but not through Crowdfunding. 

Below I describe various pre-IPO fundraising options.  The Rule 506(c) offering may be the sweet spot for your capital raise.  Rule 506(c) permits general solicitation (advertising), which allows an Internet portal to communicate your offer to its accredited investor base, but without your company jumping through all the hoops required under Regulation Crowdfunding. 

By “Internet portal”, I mean an online marketplace that facilitates the sale of securities.  Examples include SeedInvest, Circle-up and Crowdfunder.  This differs from Kickstarter (which allows companies to fundraise through the pre-sale of a product or outright donations), by permitting the actual sale of stock through the Internet.    

A year ago, I had worked with clients on zero Internet portal deals.  Over the past few months, we’ve seen them more and more frequently.  Clients that were not able to find adequate funding elsewhere have found new life through small Rule 506 rounds using Internet portals. 

Pre-IPO Fundraising Options under the Securities Laws

Raising money through Internet portals requires compliance with the same securities laws as traditional fundraising.  Below is a brief description of the most commonly used exemptions, and a cost/benefit analysis of each. 

Rule 506(b) is the typical exemption used in venture capital deals that was available long before JOBS Act 506(c) and Regulation Crowdfunding.  It permits raising unlimited capital from accredited investors (generally, a person with $200k income ($300k with a spouse) or $1 million in assets, excluding the value of such person’s home).  Under this exemption, an issuer may sell its securities to accredited investors and up to thirty-five sophisticated non-accredited investors (however, if you have even one non-accredited investor, you will need to provide disclosure documents (i.e., now you must prepare an offering memorandum with financial statements and we’re looking at a more expensive round)).  

Rule 506(c) is similar to the traditional 506(b) accredited investor offering.  The major benefit to 506(c) is advertising the round (which allows an Internet portal to reach out to its investors).  The additional requirements compared to 506(b) are reasonable: a simple Form D must be filed 15 days in advance of the deal instead of after the deal; and accreditor investor status must be verified using records like W-2’s, tax returns and bank statements (under 506(b), you could rely on self-reporting by the investor).  The Internet portal should already have the procedures in place to verify accredited investor status, and therefore, if you are raising through an Internet portal, it should not be too much more difficult to conduct a 506(c) offering than a 506(b). 

Regulation Crowdfunding allows the sale of securities to almost anyone, and not just the small minority of accredited investors.  A major benefit.  However, there are significant new requirements not required for a 506 offering, including the following:

  • * Maximum of $1 million raised through crowdfunding in any 12-month period.
  • * Reporting and financial disclosure requirements (information regarding the offering, the company and its financials), for rounds over $100k, financial statements that in some cases are reviewed by an accountant and in others, audited, plus ongoing disclosure requirements.
  •  * Limits to the amount an investor may invest through Crowdfunding based on income.
  •  * Limited advertising (only may directing to the funding portal and limited factual terms).
  •  * The issuer must be a U.S. company.


Other Offerings.  There are a few other private offering methods that you might consider, but that are not available through Internet portals.  Regulation S may be used if the offering is made entirely to non-U.S. citizens/residents and the securities are offered outside the U.S.  Regulation A+ is often used for larger rounds, given that it requires certain offering documents and filings (somewhat like a mini-IPO – also expensive compared to 506 offers). 

For more specifics on these exemptions, check with your attorney.  See also: regarding Regulation D, Rule 506(b) and 506(c); regarding Regulation Crowdfunding; and for a description of accredited investors. 

Deciding whether to fund raising through an Internet Portal

When deciding whether to fund raise through an Internet portal, you must weigh the benefit of quicker access to investors and valuable time savings (locating and speaking with such investors, networking, meeting with Angel groups, etc.) against the associated fees (some combination of cash and equity).  An Internet portal develops its own database of accredited investors - a very helpful resource you could not hope to replicate.  Regarding services, some Internet portals are more involved and help run and champion the round, while others are more like LinkedIn for investors and just provide access.  Make sure to do your research on the Internet portal’s network of accredited investors, the services provided and the fees.


Internal portals can be a great way to raise money.  Certainly explore all your options, but using an Internet portal can save you quite a bit of your precious time and sanity, and that may well be worth the cost.  Don’t get caught up in the whole “Crowdfunding” concept.  Traditional offerings to accredited investors may well provide an easier fundraising avenue with significantly less hoops to jump through, and may be accomplished through an Internet portal, the same as for Crowdfunding.

Jason Stark is a partner at Private Advising Group, P.A., a law firm in Miami.  Jason is an attorney (and also is a non-practicing certified public accountant) who advises emerging and growth companies.  He can be reached at [email protected]The information in this article is provided for informational purposes only and does not constitute legal advice.  You should not act or rely on any information contained in this article without first seeking the advice of an attorney.

April 07, 2016

Study: South Florida a hotspot for women-owned firms -- but they're small

By Nancy Dahlberg / [email protected]

Florida ranked No. 1 in the nation for the growth of women-owned businesses, according to a new report. The Miami metropolitan area led the state in growth as well, and the Miami area ranked No. 3 in the nation for the number of women-owned firms. Yet, the vast majority of these businesses have no employees.

The 2016 State of Women-Owned Businesses report, commissioned by American Express OPEN, found that Florida has an estimated 971,000 women-owned firms, employing 500,000. Florida is the fast-growing state in the growth of the number of firms (67.1 percent growth) over the past nine years and No. 31 for its 25.2 percent in growth of firm revenue between 2007 and 2016, the study found.

Nearly half the state’s total of women-owned businesses are in the Miami-Fort Lauderdale metro area, according to the report. In 2016, an estimated 453,100 firms employed 184,100 people, suggesting that the vast majority of these firms are one-women companies or employ solely contractors. In recent years, a number of small business and entrepreneurial organizations, including the Small Business Administration and Goldman Sachs 10,000 Small Businesses, have launched programs in South Florida to help these businesses grow. Most recently, WIN Lab, an accelerator for women-owned businesses expanding to Miami, cited this trend of South Florida’s women-owned businesses tending to stay very small . Still, the Miami area led the state with a 97 percent growth rate of women-owned companies between 2007 and 2016.

Nationally, the number of women-owned firms increased by 42 percent to 11.3 million enterprises, compared to just a 9 percent increase among all businesses since 2007. These businesses employ nearly 9 million people and are generating $1.6 trillion in revenue. Over the past nine years, the number of women-owned firms has grown at a rate five times faster than the national average.

"We are pleased to see the continued rise of the vital role that women-owned businesses play in our country’s post-recession recovery," said Susan Sobbott, president of American Express Global Commercial Payments. “We are inspired by these women who are continuing to pursue their entrepreneurial passions, and are strengthening our communities and economy even further.”

Among women-owned firms nationally, one of the fastest-growing sectors are businesses owned by women of color. Over the past nine years, the number of firms owned by women of color increased by 126 percent. In addition, the nearly five million businesses owned by women of color make up almost half of all women-owned firms. When comparing the growth in the number of firms owned by women of color with women-owned firms overall, nearly eight in 10 of the net new women-owned firms were started by a woman of color since 2007, the report found.

The sixth annual report is based on historical and current U.S. Census Bureau and Gross Domestic Product data. Read the full report here.

January 27, 2016

Report: Latino entrepreneurship a $1.4 trillion economic opportunity

By Nancy Dahlberg / [email protected]

The number of Latino-owned businesses have grown nearly nearly 50 times faster than non-Latino owned businesses, yet Latino businesses lag far behind in revenue compared to those owned by non-Latinos. The result is a $1.4 trillion opportunity for the U.S. economy, according to a new report from the Stanford Latino Entrepreneurship Initiative.

On Wednesday, the organization gathered founders and CEOs of Mastec, Liberty Power, Senzari, Nearpod, Rokk3r Labs and Endeavor Miami to discuss the findings and what is ahead for its new national project that aims to provide industry research and education programs for accelerating Latino entrepreneurs.

“Today the primary engine of growth are Latino business formations. That’s a volume statement. This program is focused on catalyzing the gazelles, the companies that can grow very fast and very big,” Sol Trujillo, chairman of Trujillo Group Investments and a member of the SLEI board, told the group gathered in downtown Miami. “This is a national resource we are trying to build at Stanford.”

The 40-page report, titled the State of Latino Entrepreneurship, found that the average annual sales for a Latino owned business in 2012 was $156,000 versus $573,000 for a non-Latino business. If the average Latino owned business would have generated the same level of sales as the average non-Latino business, they would have had an economic impact of $1.9 trillion versus the actual economic impact of $517 billion. That's a total annual gap of $1.4 trillion that could be added to the national economy, the study’s authors found.

To look at why there is a gap, SLEI interviewed more than 1,800 Latino companies from its proprietary database of 1.4 million Latino business owners. Some commonly cited assumptions about why Latino businesses tend to be smaller – for instance, choice of industries and the type of targeted customer base – were not supported in the data, said SLEI Executive Director Remy Arteaga. The study found no significant difference in the industry distribution between Latino and non-Latino businesses, and 80 percent of Latino businesses sold to both Latino and non-Latino customers, he said.

But the report did find some discernible differences. While Latino business owners said they wanted larger businesses, more than half of the companies were actually growing slowly, stagnant or shrinking. The report pointed out that they were more likely motivated by internal factors, such as their wish to pass on a business on to family members, rather than by external market opportunities.

Also, while nearly 50 percent of Latino entrepreneurs believe additional capital is a key to their future business growth, Latinos were more likely to rely on credit cards and friends for capital than non-Latinos, and more than 90 percent expressed serious concerns that relinquishing equity in their businesses. Trujillo said what’s missing is an understanding of an angel investor network and venture capital. In addition, the research found that the majority of Latino-owned businesses were not familiar with government lending programs such as the U.S. Small Business Administration and the federal Small Business Innovation Research program.

In particular the venture capital industry is overwhelmingly benefiting the non-Latino businesses, with less than one percent of VC funding going to Latino-owned businesses, Arteaga said.

As part of the initiative, Stanford University also launched a six-week Fellows Program for Latino entrepreneurs. In the inaugural program last fall, 78 entrepreneurs participated including several from South Florida. The first cohort included a custom online course by Stanford Professor Huggy Rao, who is an internationally recognized expert in scaling businesses, as well as in-person programs and mentorship, said Demian Bellumio, co-founder of Miami-based Senzari, who participated in the first cohort. Going forward, Stanford plans to offer at least two cohorts a year.

Because timely, comprehensive data has not been available, SLEI plans to continue to expand its 1.4 million-business database and in another 12 to 18 months hopes to provide data on South Florida and other metro regions, Arteaga said. The research will be expanded and revisited annually, and it’s available at

Added Trujillo: “We want to take this data to VCs and say here’s the data, open your eyes, you are missing a huge opportunity.”

Nancy Dahlberg; 305-376-3595; @ndahlberg.