Webinar: Catalytic Capital Investing in Latino Communities
Catalytic capital investing in Latino and BIPOC-majority communities does not equate to lower returns. Often, these investments result in market-rate or higher returns for investors. On March 1, 2022, Mission Investors Exchange and the National Association for Latino Community Asset Builders (NALCAB) presented a webinar showcasing how Latino-led and focused financial and asset building institutions are using catalytic capital to drive market capital and resources to Latino borrowers and communities across the United States. See below for a recording of the webinar along with a summary of the conversation and related resources.
- Daniel Betancourt, President & CEO, Community First Fund and FINANTA
- Marla Bilonick, President & CEO, NALCAB
- Mekaelia Davis, Program Director, Inclusive Economies, Surdna Foundation
- Laura Moreno Lucas, Partner, LAT VC
- James Wahls, Senior Vice President of Programs & Initiatives, Mission Investors Exchange (moderator)
What are the different ways capital can be catalytic?
Catalytic capital is investment capital that is patient, risk-tolerant, concessionary, and flexible in a way that differs from conventional investments. It is an essential tool to bridge capital gaps and achieve breadth and depth of impact, while complementing conventional investing.
Investors can drive catalytic impact by "taking a chance on newer, lesser known organizations,” noted Marla Bilonick during the webinar — investing early and providing risk-tolerant capital to help entrepreneurs in the seed stage. This type of investment can help move the dial for early stage entrepreneurs by unlocking future funding sources — particularly for Latino and other BIPOC entrepreneurs who face much higher barriers in accessing investment capital than their white peers. Additionally, integrated capital strategies — including grants — along with capacity building support and network building can be catalytic and support outsized impact.
How can foundations use their investments to support Latino communities?
Investing with intention by understanding and addressing biases in the investment process is critical. As Mekaelia Davis questioned, “how do we invest to address the systemic barriers that cause structural racism to exist, and how do we create the pathways to get capital where it needs to go?” Investors should understand the diversity within Latino communities, as well as the historical and cultural contexts of potential investees and communities in order to "meet communities where they are … and build trust,” noted Dan Betancourt. For investors, being flexible and responsive to the specific needs of communities of interest is necessary to have catalytic impact.
How else can foundations be good investors and community partners?
Beyond investments, making introductions and providing capacity building support can drive significant impact for early stage entrepreneurs. For investors, partnering with organizations with strong community relationships such as NALCAB, is critical for channeling capital to places it can have the most impact. It is also important for investors to embrace humility and listen to the needs of the community. As Marla noted, "don't assume that as an investor you know what’s right for community – this is where biases can play out the most." Making sure you actually know what the community needs and what would be the most helpful will enable the most impact.