From the experience of two decades in executive positions of technology companies, David Olivencia takes the helm as CEO of Angeles Investors, an organization that seeks to support Hispanic startups with growth potential. Negocios Now brings you an exclusive interview.
By David Steinkraus
With Google and Microsoft laying off more than 20,000 people recently, times look bad for the technology business. To David Olivencia, CEO and co-founder of the venture capitala company Angeles Investors in Chicago, times look good for startups, even in technology.
“If you look historically, some of the best times to start a startup have been during economic downturns,” he said. Second, he said, disruptive technologies such as artificial intelligence, quantum computing, virtual and augmented reality, and robotic automation, are just starting to emerge. Third, startups operate in huge markets, and because they’re relatively small, the effect of industry layoffs is not that great, he said.
The other point to keep in mind about technology giants such as Google and Microsoft, he added, is that they have hired hundreds of thousands of people during the last few years, and the announced layoffs represent a fraction of that.
Not Silicon Valley
Angeles Investors doesn’t invest exclusively in technology companies, he said, but leans that way. While Silicon Valley still makes 70% to 80% of venture capital deals, he said, interest is exploding in places like Chicago and Miami.
“Even towns like Indianapolis, South Bend — you’re seeing a lot of college towns pop up and have dynamic entrepreneurial environments,” he said. “The technology has been in place for a while. The pandemic just accelerated it.”
He sees two trends favoring Hispanic startups. One is continuing disruption from those new technologies. Every year, he said, he pauses to look at how technology is likely to transform our lives. “Every year I’ve been doing that for the last 15 years, and I don’t see it slowing down. It may be accelerating. I mean, think about your iPhone 10 years ago. Now you’re picking up Ubers, booking flights, making transactions.”
The other trend is the growth of the U.S. Hispanic population. Estimates from the U.S. Census Bureau put the 2022 Hispanic population at 18.9%, about 63 million people. That is a lot of buying power, Olivencia said, and a lot of entrepreneurs who are hungry for success and have the right work ethic.
Olivencia has been CEO of Angeles since late January. He has a bachelor’s degree in electrical engineering from the Rose-Hulman Institute of Technology in Terre Haute, Indiana, an MBA from the University of Notre Dame, and has worked on IT strategy at Ford Motor Co. and Verizon. Most recently he was a manager at Accenture and left that job to join Angeles Investors as CEO. He made the switch because of the potential for Hispanic startups, he said, and noted that Angeles is one of the fastest growing angel investor groups in the country.
He wants to grow the number of accredited investor members at Angeles, he said, and the number of associate members who can work toward becoming accredited investors by building their knowledge and skills, and perhaps by getting a job with one of the companies Angeles invests in.
Even if only 5% of the Hispanic community meets federal criteria for accredited investors, that’s a huge group of people who can contribute money to help grow Hispanic startups, help the Hispanic community, and make returns for themselves, he said.
In Silicon Valley, he said, people invested, made five or 10 times their investment, then put money into another startup. “That’s how they generated all that wealth in the last 20 years of this massive technology boom,” he said. “Our community has been kind of left behind in this whole space in general.”
Every quarter, Angeles receives pitches for about 100 deals, Olivencia said. Those are winnowed to four or five that are put before the company’s investor members, and they decide who receives capital.
A member of Angeles is now chief financial officer of one company that is a lesson in what can happen, Olivencia said.
Isabel Rafferty pitched about 100 venture capital firms with her idea of a video streaming company providing Latino-focused content funded by Latino-focused ads, he said. She was turned down, and her business was close to closing. Through an article in Negocios Now, she learned about Angeles Investors.
“We came along, helped her structure some things, make some connections,” he said. With money from Angeles and others, Canela continued. Today, three years later, the company has more than 50 million unique Hispanic viewers, according to Forbes, and some brands have spent $100,000 to $5 million per quarter on advertising.
“There’s hundreds and thousands of Canela Medias out there. We want to find them, fund them, and help them grow,” Olivencia said.
To contact David Olivencia, whether to ask about becoming a member of Angeles Investors or ask about funding, you can reach him at: [email protected], or connect with him on LinkedIn.
For more information about funding, visit the company’s web page for startups: https://angelesinvestors.com/startups/