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A Latino Angel Wants To Help You Invest In Tech Startups

A Latino Angel Wants To Help You Invest In Tech Startups

Posted by PanamericanWorld on July 19, 2016

For the past two decades, I have been an advisor to manytechnology startups, and I can tell you this: raising the first million is the hardest. Even harder: raising the first million if you are Latino/Latina founder.

 

Last week, DreamFunded – a San Francisco-based company that I’ve written about before — became the first SF-headquartered firm to get approval from FINRA to launch a portal that will enable many people — not just the rich — to invest in technology through crowdfunding. According to DreamFunded, it’s also the first Latino-led equity crowdfunding portal anywhere to get FINRA approval.

 

The force behind DreamFunded is Manny Fernandez, a Silicon Valley-based angel investor who has made a name for himself by helping people outside the Valley understand how to play by its rules. He’s also becoming a fixture on cable TV business shows, and will soon be featured on a Shark Tank-like show. With DreamFunded, his most recent venture, he’s leveraging new rules promulgated by the SEC that enable non-accredited investors (meaning folks who like to invest, but may not have the profile to participate in traditional funds) to get a piece of Silicon Valley.

 

There are several things I find interesting about DreamFunded.

 

First, there’s the bigger story about equity crowdfunding. The first wave of crowdfunding — on platforms like Kickstarter — enabled friends, families, and fans to put money in companies and projects they like. With the new SEC rules that firms like DreamFunded are activating, funders can own shares in the companies. It’s a big difference. Instead of just helping companies, you can engage them as an investor, and get financial returns.

 

Second, by working with the SEC rules, DreamFunded and other portals are looking to vastly expand the pool of potential investors. Before the new rules, to invest in a tech fund required that you have at least $1 million in net worth (not including your primary residence), and a certain threshold in annual income (200K; 300K if you are single). That’s a pretty small world, but the new rules make the world much larger.

 

Finally — and, from my perspective, most important — DreamFunded is committed to presenting investments in Latino-owned startups. As I have noted before in several posts, institutional Silicon Valley investors increasingly have become interested in Latino startups, not just because it’s a good thing to do (the diversity “helps you do good” argument), but because it’s the smart thing to do (diversity “helps you do well”)

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