Impact Investing

Leveraging lived experience to expand opportunity

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2019 W.K. Kellogg Foundation Annual Report - DNA In Action

Entrepreneurs of color face barriers to accessing opportunity and capital in many forms (human, financial and social) and far more often than White entrepreneurs.

No one knows this better than twin brothers Sean and Kenny Salas, who launched Camino Financial in 2014 to close the finance gaps too many businesses of color experience. “Money isn’t reaching Latino-owned micro-enterprises,” says Sean Salas, chief executive officer and co-founder.

Based in Los Angeles, Camino Financial lends to companies least likely to attract investment: 90% Latinx, primarily Spanish-speaking, 50% of entrepreneurs are undocumented and 25% have no credit history. “The companies we invest in, many banks would take a 180 degree turn and run the opposite way, as quickly as they possibly can,” says Salas. “And unfortunately, they have. But for Camino Financial, we’re here so when the banks say no, we say claro que sí [of course].”

“They are leveraging the power and scale of technology to create economic agency for low-income, communities of color that have historically been overlooked and left behind."

Kesha Cash, Impact America’s founder & general partner Tweet

The Salas brothers recognize what economists affirm: barriers created and preserved by racism – implicit bias, negative narratives or perceptions of people of color, and the resulting policies and practices that hold some people back – limit economic growth. The opportunity costs of racial inequity are far too great to ignore. The W.K. Kellogg Foundation’s $3 million investment in Impact America Fund is building on that knowledge to drive capital to communities of color.

Impact America is a firm that invests in other entrepreneurs and companies predominantly led by women and people of color, like Camino Financial. Impact America Fund invests in large, underserved markets to expand opportunities in communities of color, where entrepreneurs have been overlooked and undervalued by traditional investors. Ninety-five percent of Impact America’s portfolio of companies have a woman or person of color at the helm. Of the six investments made out of their current fund, all of the founders met the “lived experience standard,” a criteria the firm considers key to their strategy.

“The firms and founders we’re investing in, like the Salas brothers, are creating products and services for communities where the alternatives weren’t serving them or didn’t exist at all,” says Kesha Cash, Impact America’s founder and general partner. “These founders have deep lived experience within the communities and problem sets they are addressing. They are designing technologies that are not just another gadget or the latest trend. They are leveraging the power and scale of technology to create economic agency for low-income, communities of color that have historically been overlooked and left behind.”

In the process, Impact America is increasing market transparencies and efficiencies, lowering costs for consumers, and increasing incomes and mobility for workers in communities of color.

“We invest in companies that are designing business models and products that are having a positive impact on low- and moderate-income communities, and helping people create more economic agency and economic mobility,” says Cash. “We are restoring dignity and respect. And, we’re using capitalism and money to do it.”

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