From Immigrant To Middle Class Wealth In Just One Generation (With Mendoza Venture's Adrian Mendoza)

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This is a podcast episode titled, From Immigrant To Middle Class Wealth In Just One Generation (With Mendoza Venture's Adrian Mendoza). The summary for this episode is: <p>"In this world outside of the Latino community, to the white world, everything's negotiable."</p><p><br></p><p>Adrian Mendoza is the Co-Founder and General Partner of Mendoza Ventures, an early and growth-stage fintech, AI, and cybersecurity venture fund that he founded after noticing no one in the startup world looked like him. </p><p><br></p><p>In this episode of The American Dream podcast, Adrian and Elias discuss why there are fewer Latinx seen in the startup world, how more Latinx can get into tech (and why they should), and why being an accredited investor is the next milestone everyone should be aiming for in order to experience at least middle-class wealth.</p><p><br></p><p>Be sure to hit the subscribe button to get new episodes when they drop every other Tuesday.</p><p><br></p><p>In the meantime, be sure to leave a ⭐️ ⭐️ ⭐️ ⭐️ ⭐️ ⭐️ review and share the pod with your friends. You can connect with Elias and Adrian on Twitter at @eliast, @AdrianMendozaVC, and @DriftPodcasts.</p><p><br></p><p>For more learnings from Elias, check out his quarterly newsletter, The American Dream. You can subscribe at https://www.drift.com/insider/learn/newsletters/american-dream/</p>

Elias Torres: I'm Elias Torres, co- founder and CTO of Drift. You are listening to the American Dream Podcast. Did you know that Drift is part of just 2% of VC backed startups led by Latin American founders. Well, I'm on a mission to change that. On this show, you will hear from leaders who have achieved their own version of the American dream. We'll talk about what the process looked like to get there. The obstacles they face along the way and the work we still have to do to build the new face of a diverse corporate America. Foreign language to the American Dream podcast. I'm excited to have Adrian Mendoza on the show with me today. Adrian is the founder and general partner of Mendoza Ventures, the first Latinx fund on the East Coast. Adrian and his wife, Senofer created Mendoza Ventures in 2016, to address the funding gap they found in the precede investment stage for underrepresented founders. If you're underrepresented, you know it, you just can't get money, especially precede, no experience. So Adrian and I met over breakfast a few weeks ago and we discussed why there continues to be such a funding gap today. So I'm excited to continue the conversation and talk about the work that Mendoza Ventures is doing to address the issue. Adrian, welcome to the show,

Adrian Mendoza: Foreign language. Thank you for having me. The Genesis of this is to delve in, we had breakfast, it was going to be at half an hour. It turned into an hour and a half conversation talking about the topic we're going to talk about today. So I'm excited to talk more and let's talk about solutions and how to fix the problem.

Elias Torres: Yeah. I mean, I think we talked that long because Latinos talk that long, so it's just easy.

Adrian Mendoza: Yeah, absolutely. We're always late and we always talk way too much.

Elias Torres: And we always talk too much, but I think this is important, because you and I share a common mission, which is we've been very fortunate in this tech community, in this tech ecosystem to have success, to be able to rise above poverty, as immigrants, as sense of immigrants, and what we want to do is we want to help other Latinos, BIPOCs, underrepresented people be able to achieve the same. So that's what we share and so what we want to share here is about advice on how more people can break into tech, how more people can accomplish, achieve, earn generational wealth. Let's talk about that.

Adrian Mendoza: I can't agree with you more, and I think, as you said it perfectly, both of us have been so lucky. I'm the son of two Mexican immigrants, grew up in Southern California. My mom was a bookkeeper. My dad was a carpenter, cabinet maker, and I tell every Latino I meet," If I can do this, you can do this too."

Elias Torres: Exactly.

Adrian Mendoza: There is no great wall that you have to climb over. This is us, our game to win and our game to lose. You know what, you can't say it more, the benefit of tech is what was able to get me to really transform from where I grew up to where I am now.

Elias Torres: Right.

Adrian Mendoza: And that's something that we have talked in our conversation, that the jump from an immigrant to the white middle class years ago, author Mike Davis wrote a book about Latinos in America, and said that it would take six to eight generations to get there.

Elias Torres: Yup.

Adrian Mendoza: And Elias and I have in just one generation, skipped six and it was really because of our involvement in the tech ecosystem and the tech community to take someone like us that came from humble beginnings and now be where we are representing Latinos in tech, Latinos in VC.

Elias Torres: Yeah. I think that's really what we're going to have to do, and I just see that as a struggle, that I can see why it takes six to eight generations. If you are white and you get to send your first children to college for the first generation, that makes a big difference. Then, those kids of that generation have now people that were educated that are professionals that have jobs. So, you get out of it quicker but if you never go to college, if you never get good jobs, you're always stagnant and it's really hard to break out of that.

Adrian Mendoza: Yeah. Exactly.

Elias Torres: And much worse, what we're trying to show people is that the American dream to me, my first American dream was to be able to own a house, and most Latinos struggle, I don't know the stat but everybody rents and it's so hard to buy a house.

Adrian Mendoza: Yeah.

Elias Torres: Prices are fleeting, and then, what we are talking about is more about... it's beyond buying a house's. It's buying a vacation home, is be able to pay for your car's cash, is be able to pay for your kids' college cash, is be able to leave money for generations for your descendants. We want to show Latinos that that's what's possible, and that's what we have to all aim for, because we can't just leave that money in that wealth for others to collect.

Adrian Mendoza: Yeah. Exactly. And we start off by... I get approached by Latinos on LinkedIn and social media asking me for advice all the time. A lot of them are in the same situation that I was at. They are sons of immigrants. They are first generation in college and they start asking for advice on where to go, what to do and then, for me it's," Okay. Well, before you even choose what you're going to do in college, before you're even going to do anything, you have to learn that in this world, outside of the Latino community, to the white world, everything is negotiable. If you don't ask, you don't get." So, when people, Latinos, they were like," Well, I can't get the job in private equity. I can't get... and it's like, no, did you ask? They were like," No, we've talked to Latino entrepreneurs." I have been a Latino founder who has IPO'ed a company before, and even I had to sit him down and was like, the problem with our community is we don't ask for help.

Elias Torres: Absolutely.

Adrian Mendoza: We have to start asking for help.

Elias Torres: Why don't we ask?

Adrian Mendoza: You know what, Latinos as a culture in a community, whether you're Columbian, Mexican, Puerto Rican, we're culturally liberal but we're physically conservative. We are like," Oh no, let's be a small family unit. Let's not talk to other..." even though we have large families, even though we have large communities, we're still very insular. So for us to break out and ask someone that doesn't look like us, is one of the hardest things that I see with Latinos, and we have to learn the white guys from Stanford, they ask for help. The Asian kids, they ask for help. Everyone is asking for help, and it's really interesting to see us as a community because we have the one thing that very few communities have. A lot of us have the journey of either us or our parents left everything, came to the US with nothing and we started from scratch. If we, as a community can do that, we can do anything and we can jump across the eight generations, but you have to also be thoughtful and you also have to be strategic and starting to think about what do I do?

Elias Torres: Yeah.

Adrian Mendoza: And you know what, the advice I give to these people that reach out to me," Find a career in finance, find a career in technology, whether it's arts, but user experience, whether it's coding, whether it's finance," but the opportunity of being in a tech community that now is paying two to three times more than if you weren't in this world, that is about finding the opportunities to leapfrog you. At the same time, you have to live and work, like there's no safety net because there isn't.

Elias Torres: There isn't, right.

Adrian Mendoza: What you build for you is literally going to be what you may change for your lifetime and the lifetime afterwards. We're going to repeat this. I think this is profound. It's like, I remember Latinos, we struggle in a company or in tech or wherever, because of racism, bias, discrimination. We don't get promoted. We're seeing a second class citizen. We're like, we're not as good as the white guy or this or whatever, and we always feel like we're oppressed, and we're not going for it. So, we dream of just getting a promotion, much harder is to imagine yourself as the CEO of a company.

Elias Torres: Yeah.

Adrian Mendoza: You know why it was funny because David, my co- founder, he laughs, because we're both Latinos, but you'd be amazed. How many emails David gets from white males asking him," Hey, can you help me find a CEO job? Do you know of a company that needs a CEO? Can you help me?"

Elias Torres: Yeah. Agreed.

Adrian Mendoza: We are asking a Latino for a CEO job. Absolutely, I've had nonprofits reach out to a Latino.

Elias Torres: Yeah.

Adrian Mendoza: At the same time, you and I had the experience. We were founders at the same time, and look, I tell this story all the time. When we started, you started Drift, I started my companies, in tech community, David was the black guy, we were the ambiguous brown guys and years afterwards when I started Mendoza Ventures here in Boston, and there's a reason I put Mendoza on it, is it was... you look at the cap table, there's a Latino name. There is no hiding that I'm Latino. You can't hide it. I'm the short brown guy. I was like, if I can't hide it, why am I going to put some different name to it, and wouldn't you believe when I started that, the amount of Latinos coming out of the closet was incredible. A CTO of a major company coming out and saying, I'm a Cubano. Another entrepreneur coming out and saying, I'm a Latina. And it started justifying it to be okay to come out of the closet, and part of it is with our community is there is Latinos that don't want to tell anyone they're Latino, that they speak Spanish at home because they think that they're going to be... that someone is going to be racist, that they're not going to get the promotion. I'm like, there is enough of us, like both of us on this call to show that we can do it, looking the way we look.

Elias Torres: Yeah.

Adrian Mendoza: We have to get over that because in the black community, there's such a shared identity of being black.

Elias Torres: Yeah.

Adrian Mendoza: And within our community, what frustrates me is there are Los Mexicanos, Los Puerto Ricanos, these different communities, but I'm like," No, we are all Latinos."

Elias Torres: Yeah.

Adrian Mendoza: We have to stop separating out and say," Well, that's a Cuban. He's different than us. Well, that's a Colombiano very, that's a Puerto Ricano, that's different than us." We just have to see, we're all in the same boat together.

Elias Torres: Absolutely. I mean, I think that we have to figure out, I think the us, I love what you said about us being immigrant and saying like what we are able to do. I'll tell you this, a startup is tough, being a founder is tough, being an employee is tough, being an executive at a company at a startup is tough. It is hard, but when I hear people complaining of all kinds to anybody, complains about, being at Drift is hard, being in a tech startup is hard. I'm like, this is nothing. This is nothing like my grandmother crossing the river and riding on a bus from Nicaragua to Mexico's border, crossing the river with the coyote when she was 65 years old. Then, having nowhere to live or not speaking the language and be able to survive and lived here for 30 years to help me get the green card that allowed me to come here legally.

Adrian Mendoza: Yeah.

Elias Torres: That's hard, cleaning, that this is being a nanny to some rich person in San Francisco, in Divisadero Street. That's hard. What we're doing, is easy.

Adrian Mendoza: I can agree with you more.

Elias Torres: Yeah.

Adrian Mendoza: I get founders that say," Oh man, but I have to do late hours, and this and that." I'm like, I was working with my dad. My dad was a carpenter, cabinet maker, working out of the house. Numerous times he would work out of the house or he'd work in wood shops and on Sunday dressed in his church clothes. He would go to a wood shop, looking for work and we'd leave him there and we'd have to pick him up eight hours later because they offered him a job, and they're like," Well, we're a man down. Do you want to come and work?"

Elias Torres: Yeah.

Adrian Mendoza: And he would take it.

Elias Torres: Exactly.

Adrian Mendoza: It didn't matter that the kids were in the car, and then, when he was working in the shop, we would work on the 24th. We would work on Easter, like working on rich people's houses, installing cabinets, renovating with him, my mom and my brother in town.

Elias Torres: Exactly.

Adrian Mendoza: And we'd all be helping.

Elias Torres: So, we have a superpower because we know how to work hard, but the opposite of that is that we are not comfortable asking.

Adrian Mendoza: Yeah.

Elias Torres: We need to change that. We need to go ask. No matter how many times you get rejected, you keep asking.

Adrian Mendoza: Exactly.

Elias Torres: Nobody is going to go and give it to me, if I don't ask, I was thinking about this, this morning, I was walking my dog and I'm just being completely transparent, but one of the things that I'm thinking about is how do I help other entrepreneurs, and maybe one of those things could be me, being in a board. So, I haven't been asking for entrepreneurs, whether they need help, nobody is going to come and contact me and say," Hey, be on my board."

Adrian Mendoza: Exactly. It's on us. No one is going to be like... when we started Mendoza Ventures, one of the things that we... the reason we did it is having gone through startups and raising money and dealing with venture and PE guys, we saw no one that looked like us.

Elias Torres: Yup.

Adrian Mendoza: What was really incredible is we were doing an interview with someone that had reached out to us, looking for a position and what was really incredible, and it was a Latina, and she reached out to us because she was at an event in December and it was in New York City, and on the monitors, they were giving an award to my partner, Senefer. She looked at it and was like," That's a Latino last name and it's on the board. There are no other Latinos here." She said," I have to do something. I need to do something." And just that act of reaching out to somebody to be like, I need to meet them, do you know them?

Elias Torres: Yeah.

Adrian Mendoza: That was incredible, and I was just like, just the fact that she did that is amazing. We all have to do that. We all have to ask, and we always have to realize that if we need to make a difference, like couple of months ago, you and I both saw that the stat, that one and a half to 1% of all venture funding goes to Latinos and there was Latino senior executives complaining about it," Oh my God someone should do something." My view on it was, this is why I do what I do. I'm not going to sit and complain. I'm going to say, I'm going to write the check. I'm going to fix the problem.

Elias Torres: Yeah.

Adrian Mendoza: We as Latinos, can't step back and say," Someone should do something. I'll get foreign language.

Elias Torres: Yeah, exactly.

Adrian Mendoza: If we want money to go into our communities, it has to be us. If we want to educate our communities, it has to come from us. If we need to make the change, it has to come from us because no one else is going to do it for us.

Elias Torres: I was just mentoring a CEO of a Venezuelan, of a tech startup, and it's amazing, because he says," Okay, I need to talk about this five problems." It's like, this problem, this problem, this problem, this problem. I'm like," Yup, I know very well about them," and I can go immediately embrace him and help him and give him the advice because he's trying to manage all those things at once. So we have to help, I was going to say back to... I want to talk a little bit about something else, but the role models, why are we so good? I think that leaving everything behind and coming here's, it's one of the hardest things... I'm making it up, but it's one of the hardest things humans make. I mean, we are afraid of change. Humans are afraid of change, uncertainty. Having nothing, that's all hard. It's a very hard thing to uproot and move. So, especially Latinos, that Latinos, we don't move as much as Americans. Americans can find a new house, rent, buy.

Adrian Mendoza: Yeah, and take up-

Elias Torres: You stay in the same house forever. So, the fact that we can do that, I believe so is because of role models, because we have so many generations that have immigrated to United States. We know that it's been better here, even if you are the lowest levels here, sometimes it tends to be better to what you had back in our countries. So we have a role model, we have an image, just like this woman that came and interviewed with you. It's so important, you can see something else. Then, you say," If that person did it, then I'll be able to do it and endure it." Now, what we are trying to say is that come and make generational wealth for your family and for your descendants. Come into tech. So let's talk about that, of how do we go about doing it?

Adrian Mendoza: Yeah, and I think you're right on the money is that if we're going to do it, we have to start. It deals with the education. It deals with, when I went to college, Latinos applying were 63%. I went to USC for undergrad, 13% graduated and that's miserable. That stat was miserable and it's still miserable now, but the expectation of where we go, we have to start thinking about, if you are going to find a career, all right, how do we leverage the careers of others that came before us? How do we ask for help to be like, what should I study?

Elias Torres: I have one answer, tech.

Adrian Mendoza: Absolutely, but the thing about it is it's not just about computer science. It's not just about engineering. It's about how did you finance, law, the arts, design, all of it but then, still be like strategic where you're not like," Oh, I'm going to play it safe. I'm going to find something in my neighborhood. I'm going to find..." It's like, you want to go work, go look at the big tech companies, go find the opportunities, and if it takes you to have to get up and leave, get up and leave.

Elias Torres: Absolutely. That's-

Adrian Mendoza: My experience is like I moved to Boston to be part of the tech community. This was farthest east. Anyone in my family had ever gone. Maybe the farthest east at that point was like Las Vegas, from LA to Las Vegas, and I moved here sight unseen. If my parents could do it, I could do it too.

Elias Torres: I did this-

Adrian Mendoza: Anyone should be able to be like, wherever the opportunity takes you because you can be wherever you are and earn 40, 50 grand, with the ability of being 80, 100, 120, 000, that even... what may stop you is with some Latinos, they realize that first job out of college, they're probably earning more than their parents have ever earned. You know what may stop them is," Oh, no, I can't do that to my dad or I can't do that to my mom." You have to put it all aside and go for it. There's no like, I have to... no, you have to take care of yourself because in taking care of yourself, you can then take care of everybody.

Elias Torres: I think there's something profound there. I came from Nicaragua, with nothing and settled in Tampa. Six years later, I took a job. I was one of the very few out of my whole graduating class at USF that took a job in the Northeast, in Danbury, Connecticut, and I'm working for IBM. It was cold. It was really expensive. I couldn't even afford it, but there's another study that talks about your zip code, where you're born, dictates the amount of income you're going to have for the rest of your life.

Adrian Mendoza: Yeah, and when you look at that's how you get judged on a mortgage, that's how you get judged on auto insurance, that's how you get judged for the rest of your life. So, if that's the case, pick up and move.

Elias Torres: Pick up and move, so that's a simple advice. GTFO, get out. Get out of where you are. Go get the list of zip codes and say," This is where Latinos live, that are broken, that are poor," and get out of there. I have so many families that I've heard, that I don't know if it was yours or others too, that it's like the parent went and sacrificed... clean houses, but sacrificed everything for them to go to the private school in the other zip code. Break him out of there because we need to go, and when I move to the north, I go back to Tampa, because everybody, I went to college is still in the same normal jobs that are local.

Adrian Mendoza: Yeah and then, the students, there are afraid to move. I've been talking to USF at this school and I'm like," Go to San Francisco, Go get a job." Who cares? Even if you're in LA, go to San Diego and you know. In LA, I'm in the same situation. I grew up on a street where my fifth grade teacher was across the street. My godmother was two streets down. She's literally still there. She just turned 99 last week and was covered in the news because she's a big Dodgers fan. The kids of my elementary school, all lived on that street.

Elias Torres: Exactly.

Adrian Mendoza: And wouldn't you believe, they're all still there.

Elias Torres: They're still there. So I think, learn to ask, get up and move, go follow the money, study tech. Give me an advice that all Latin parents would say.

Adrian Mendoza: Yeah. The Latino parents would say," Mico, that's too risky."

Elias Torres: Right.

Adrian Mendoza: You should work at a bank.

Elias Torres: Okay.

Adrian Mendoza: You should be an electrician. You should find a safe job. It was funny because even... my parents passed away a few years ago, even until the end, my mom never really understood what I did.

Elias Torres: Yup.

Adrian Mendoza: And at a certain point, I had to leave that behind, away from me. In Spanish, we have this saying, and it's based off of a movie from the India Maria. It's foreign language. Not from here, not from there, and you have to choose a side. You have to like-

Elias Torres: No, not even,

Adrian Mendoza: I don't live here anymore. I live over there.

Elias Torres: You know what-

Adrian Mendoza: And I have to build that life there.

Elias Torres: Right, somebody called me the other day, I'm a straddler. They said I'm a... it's foreign language but we can never leave our identity behind. So it's like, we're one foot here, one foot on the other side.

Adrian Mendoza: Well, part of it is you have to have both feet somewhere.

Elias Torres: Yeah.

Adrian Mendoza: You can't always live in transition.

Elias Torres: Right.

Adrian Mendoza: And when you do, it will be hard. When I first moved to the Northeast, people had never met a Mexican American. I was in... the impetus for me to come is I applied for Harvard, sight unseen.

Elias Torres: Got it.

Adrian Mendoza: And people were like," Why are you doing that? You can't afford that. Why would you..." and I did it, and you know what, when I got accepted, I went back and was again, the power of asking," Hey, I can't afford this. Can I have a scholarship?" And they're like,"Yeah, of course you can."

Elias Torres: Yeah. Exactly.

Adrian Mendoza: And they covered half of it.

Elias Torres: It's funny, because I have a friend from LA and I met him at South by Southwest. We hit it off, a Mexican American. We had white friends in common and they couldn't believe how quickly him and I were just connected. Then, he came to visit me to Boston and never had come to Boston, and he was like," Wow, this place is so cold. It's so hard. I cannot believe you live here and this is where you build companies." I don't want to live... I feel so comfortable in LA with family and the culture and the food and the people everywhere in the street, what you did to come to this place and break into it, into a huge success is so hard in his mind, but I didn't even notice that, because I didn't know any other way.

Adrian Mendoza: Because we did it, but that's the thing. By doing that, it's setting an example.

Elias Torres: Yes.

Adrian Mendoza: And it was really funny because I've had numerous experiences here and I'm sure you've had them too, where I would be walking into a place and the Latinos would be like, he's walking in as a customer. A Latino is walking, and the Latinos in the bakery, and in the back, they're just looking over there like," Wow, there's a Latino coming in." I hope that changes the perception of yeah, of course we could be a customer, of course we could be walking into front door, we should be.

Elias Torres: Absolutely.

Adrian Mendoza: We had interesting experiences. I'm sure like, I would have the white kids looking at me and saying he speaks perfect English yet he speaks Spanish and he looks like them. Then, the kids from Latino America, from Argentina, Chile would look at me and they're like," He looks like us, but he speaks perfect English." This is what it is to be a Mexican American, a Latino American. This is it, is to be an American, but still have my cultural identity of I'm a Latino.

Elias Torres: I think you have something that I usually don't talk about. So, I don't want to talk about too much about the careers and stuff, just going to tech, and I like what you said, mix it up. However, let's talk about something else. I think you're very adamant about this and you're teaching me even, about investing. What we're trying to do is give advice of how people make money. So somebody might say, spend very little, save all your life and you'll be able to have... be able to buy a home and make the payments. That's one type of advice. The other one is we can say," Go get a job in tech and get a good salary." Okay. Maybe buy real estate, because it's going to depreciate, and then you're going to be able to buy multiple homes. That's the advice that we share sometimes in our community. It maxes out. You have different advice.

Adrian Mendoza: You know what, I was thinking about this and it was funny because I was talking to someone in Toronto and she said," In Toronto, we have, what's called the two million dollar problem, and it comes up over and over and over again of how do we fix this?" The problem is people make money in tech, they make money, and what do they do? They have two million dollars, a million dollar goes to buy a house, a million dollar sits in cash and then, that's it. It doesn't get invested. It doesn't go into philanthropy. It doesn't go into anything. It just sits there. They have this problem that they can't get over. With us, one of the things that I see in our community is Latinos, they go, they do well, they get the job in tech. They're now making 200K and then what, the majority of wealth... and I'm not talking money you make in the stock market. I'm not talking money you make in real estate, but multi- generational family wealth. The things we read about, it's made in mergers and acquisitions. That's only made.;/ plain in private equity. I had this funny example where I was an accredited investor and I'll talk about what that is, for 10 years and didn't even know it. Then, afterwards, I was like," You know what, even if I did, how many funds would let me in? I'm a brown guy. I'm a short brown guy." Okay, let's be honest, and I tell people, the people that come in then... let's say the people that reach out to me that are in college and/ or their first job and they're like," Well, what do I do next?" It's like, learn what it means to be an accredited investor. The bar is actually pretty low and the other thing is there's no accreditation. There's no certificate you have to get. I was talking to a female investor who came into our fund and she said, I got the certificate. I was like, what are you talking about? She's like," Well obviously, I have to get a certificate to be accredited." I'm like," Yeah. No. There's no certificate out there. There's no governing body. If you check the boxes, you're an accredited investor." She was like, what? It's, if you're making 200K a year, if you have a million dollars in assets, which is, if you have like, okay, you bought a property and it went up, there's your million dollars in assets. Most people in tech are now making over 200K in the Northeast, and the most important one, because I talked to a Latino last year who was a CFA. He said," Adrian, I really want to do what you're doing, but I'm not an accredited investor." I was like," Hey, you know the rules change, and if you work in finance, if you're an associate, an analyst, you count now as an accredited investor." He was like," What?" I said," Yeah, if you are a Latina and your husband is an accredited investor, guess what? You now are an accredited investor." And it's all of this about how do we get people to start learning that and then, start looking at, all right, how do we take a little bit? When we started Mendoza Ventures Fund too, we got to our target. Then, I went back to all the investors and I said," Hey guys, we're at the money we told you guys, we were going to raise, but I'm going to drop the minimums." They're like," Why?"" I want to build the next generation of diverse investor." I opened up the minimum to take as many different amounts. Whatever people could put in, I was like," Come in." Several of them were like," Why?" It's like," Because I'm going to try to find a way of starting this life, that if I want you to participate in the wealth generation experience, by doing a little now on the next one, you do a little more." And then, the next one you do a little more and guess what? In five, 10, 15 years, it starts paying out. If I can take that small amount and 10X it or 5X it or whatever number that we can do, yes, it's risky, but it's the ability of taking Latinos to take more risk because what happens there are Latinos out there that have foreign language and restaurants and dry cleaners and they're accredited investors. What do they do? They take the safe route of buying real estate. Then, what happens? Their kids don't want the business. They sell the business and then, the path for multi- generational wealth gets lost. We have to be able to find a way of a growth strategy. You own a business, your parents own a business. You own real estate. You are in tech, you are in finance and be like," No, take a little bit and start investing in other things that aren't the stock market, that aren't in equity to start building that track record."

Elias Torres: There's a couple things I want to review for people here. One, I met a young kid, actually the other day who after meeting me, started asking a whole bunch of questions, about this stuff, and he goes and says... he doesn't really know about my success too much, but he goes, are you an accredited investor? I go," Yes."" Oh my God, that means that you make 200 or however million in assets." I'm like, yes. So, he's like," I'll never be able to become an accredited investor, so far," because struggling to pay a student loans single, still nothing. Right. It's just barely like apartment and everything, but it's a good reminder that that should be everybody's goal here. Everybody should go contact you, whatever, read it up, look it up and say... and there's also spouses. If you combine salaries too. So, like you have to become an accredited investor. It's the current limitation of the system, that limits who can invest and people are fighting to bring that down, but it's this barrier that in a way, I think maybe you're right. I'm going to throw some work stuff in here. It is to keep poor people from making money, because by putting those barriers, what's the difference with somebody that has money or doesn't have money if they want to put$ 25,000 into a fund. I don't know one of the reason, it's made up. People think that just because you have money means you're a sophisticated investor. You're not.

Adrian Mendoza: Really not, yeah.

Elias Torres: It doesn't matter. You just got to write the check and put it in. You have a point, people that have restaurants have money or like a business, even a Latino has a small business, they're in the next echelon and they have a car, they have a house, they buy, they pay, but they're not investing.

Adrian Mendoza: Yeah, exactly.

Elias Torres: I'll tell you this. I was at a help desk. I used to work while I was in college at the help desk for IBM. This black guy came to me. I forget what he was, but he was like French or African, and he came to me and he explained to me, and he says," Elias, you need to start investing." I like to listen advice from people. I said," Tell me, you need to be putting your money in the stock market." He goes," You need to start now." I listened to him and I went and put a$ 50 deduction a month into an index fund, right? I'm thinking, you know what, because I'm listening to this advice, about investing, I'm going to be wealthy. I'm going to be good in the future, because I was like 17, 18 years old. So I did it and then, I forgot about it. I don't know how many years later I looked it up. I actually don't even know where that fund is. I forget what it was, so I lost out... that money is still sitting there, but when I checked it, years later, it was only worth like$6, 000 or something like that. It had grown, but it's not going to change my life. That's what you're saying. So I want people to understand that. What we're talking about is the ability to,"You know what, go buy a house, cash, that you want and not even be worried about it and then be able to change jobs if you need to, start a company." So tell me why becoming an accredited investor and investing in PEs or VC firms, why is that different than go putting something into... every month into an index card?

Adrian Mendoza: When I was young, I was getting the same advice. So after Harvard, I also ended up at IBM. I remember someone giving me the advice about investing and all the power of compounding interest.

Elias Torres: Yeah, yeah. Yeah.

Adrian Mendoza: If you compound in for every month, you're going to have a million dollars and I'm like," Yeah, in 20 years, but is that going to be life changing?" No, you compound interest at four, 6% a year, like who cares? That's not going to change the trajectory. You retire, you'll live off of that for 10 years. That's it? There's no multi- generational wealth. Even when... at the end of our startup, we were like... we had a little bit of money, we were like," Well, what are we going to do?" The amount of people that I now talk to that are like... I talk to another Latina out of San Francisco and he said," Adrian, I'm interested in talking to you about your fund, but I also want to angel invest. And I also want to do real estate and I want to do the stock market." I was like," Do it all, do all of it. Not just one or the other, don't be like conservative. Do all of it." Continue to angel invest, continue to invest in private equity, continue to invest in real estate." I tell people that, like I had an entrepreneur who exited his company and it was amazing how he was just like frantic about what do I do? I was like, here's what you have to do. This is what advice I tell everyone. You need to have three buckets. You need to have your cash bucket so that you can do whatever you do and live off that and go on vacation and have a great time and enjoy it, because you also have to pay for yourself. You have to enjoy just your life and be happy. Then you have to have your retirement bucket. Your 30 years, you want to invest in ETFs or the stock market. That's a 30 year down the line. Is it going to be life changing? No. Then you have to invest in your risk bucket, which is private equity, which is venture, which is angel investing because yes, that's risky, but the opportunity for returns are much greater than any of those, much greater than the cash that's sitting there, getting quarter percent interest, much greater than what you may get playing the stock market or mutual funds or ETFs. It's about how do you take... and this is, what's very unique about our community because it goes back to that fiscally conservative. My parents had a money market account, that's who I grew up money market account that had maybe 1% interest and CDs. That was the riskiest thing that my mom would ever invest in. That was it. No stocks, nothing, no retirement, no 401k. To go from there of how we grew up, where that's success is you bought your car in cash, or you had a down payment for your house to saying," I'm going to take five to 25 to 50 grand and I'm going to put it to something." It's in order... We have to get ourselves past this idea of this is too risky, we can't do this, to start participating.

Elias Torres: I hate giving vague comment, and I want you to give me something concrete for people to hear here. I think you're naming the other side, right? I did an index fund and I ended up with... after years of putting money, I ended up with$6, 000, who cares? In a CD, in a money market. Nothing. Even if you wait all this life, say maybe you buy a car and that's it. That money is gone, poof, it's useless. So that's nothing. Give me an example of what happens if I put$ 25,000 in a PE firm or in a VC firm?

Adrian Mendoza: Yeah. I'll use the example for us. Again, past performance is not indicator of future returns. Just zooming my financial advisor hat, is when my wife and I started Mendoza Ventures. We had our exit and we said," Well, what are we going to do? Are we going to start angel investing?" We're like," Okay, well, that doesn't sound right. Why don't we pool our money together?" When we put the money that... a little bit of the money we had made and let's start doing something with it. We took$ 110,000 and three years later, we made it into 1. 2 million dollars-

Elias Torres: Now, we're talking concrete to people, right?

Adrian Mendoza: Exactly, and it was entirely risky to do it, but the reward on the other end was greater. That was enough to do two things, is to prove that we can do what we can do and that we weren't scared of doing it. The second is to realize that there was a reward enough to start financing, everything else. All of that money went into investing again. It didn't go to buy a house. It didn't go to... it all went and started investing again. Mark Cuban, if you ever hear a good Mark Cuban, he always talks about trading up. You always have to trade up. You make money, you trade up. You take that money, you trade up. You keep on going and going and going. That's real growth. You take the 10,000, you Make it 100,000. You take 100, 000, you make it 500,000. You take the 500, 000, you make it a million and you just keep on going and going and going.

Elias Torres: Right. I love that because that's personal. That's real. People can role model and see it, and I want to try to connect it a little bit to the person that says," Well, how am I going to get 100, 000? Because people get stuck in that. I'm going to give a little story. There's this role in tech companies called BDRs, SDRs. These are not sales people. These are the assistants to the sales people. They get them leads. They just call. Call and send emails to get a lead. If they cannot sell it, they pass it to their rep. You literally have to know nothing. You know zero to do this job. You have to speak and you have to show up to work. That is the entry job position in a tech world that has the least requirements in education and experience. So the other day I was with my team, last year. I saw some of them, they were leaving the office and I said," I'll give you a ride. I'll drop you home." And I got a chance to spend time, a little friend is giving with them at the house. I surprised them... I'm the founder. I surprised them. I was like... I'm at the house and they were like," What are you doing here?" So we had a good time and you know what they blew me away? They all were so excited because they were working to make calls, to find leads, but they saw one of the other SDRs turn into a sales rep. A sales rep in tech can make between a hundred to 200 to$300, 000 or more a year. All you have to do is be an SDR for a year, tops, hustle, you get turned into a sales rep because you're learning and hanging with them. So they were all coming from different backgrounds, tough, not a lot of money in their families and whatever, but they saw the path finally, from all the jobs they had before. They're like," We can become a rep at Drift." I was like, so happy for them because I was like, they're going to make it. They see it.

Adrian Mendoza: Yeah. Well, and it's the path, but they also... and this is what our community has, is they have to hustle.

Elias Torres: Yup.

Adrian Mendoza: You have to hustle. Nothing is going to be given to you, and it's funny because a couple years ago, I met a Latino that was in venture and this was his first job and it wasn't going so well. I was like," Why it isn't going so well?" He's like," I know other people have this job and they're doing better than you. What is it?" He was like," I don't have the network." Well, build your network. Go out and start calling people and start asking for help and start reaching out to them. The person that had his job was a woman who was amazing. She had moved from one side of the country to the other side of the country. She called me and emailed me and LinkedIn, it was like," Can I buy you a cup of coffee?" She bought hundreds of cups of coffee to get to know everyone in Boston, get to know everyone in the Northeast. I was like, this is what you have to do. Your culture tells you foreign language. It was like, no, you have to drop it and just start calling everybody and ask for help and just do it because... and put the hustle that we all know how to do. Just like those SDRs, if you hustle, there is a path to the test. Not only that, but if you get there, you can't live over your means. You got to live where you are and start taking that money, putting it aside so that when you get there... this is the advice I gave to another Latino, who was like... he who was like," Adrian, I think I'm about a year to two years away from becoming an accredited investor and I want to invest in you."" I want to do all of these great things like you do." I was like," Then start putting money aside, in the next two years, 10, 20, like your bonus, you put it aside, commissions, you put it aside. Forget about the money, put it aside and say, that's my risk bucket. That's the things that I'm going to use because in order to get there, we got to get the path, but you have to save. You have to make the dedication of I'm going to do this, and at the same time, use it as an experience to learn." Every Latino that we brought in that second fund, they asked me," Adrian, well, what do I do?" I'm like," I will teach you the industry. I will teach you how to angel invest. I will teach you this just by being around."" I'm going to invite you to the events, that you need to do this and what I ask for you is bring another Latino or another Latina and just bring them into the room. Just do it," and because at the same time, you and I can't just do all of this, it has to be all of us because one of the things that's magical of what I've seen in the last 20 to 30 years of being in tech is that money that's made in private equity, it goes back into our communities as angel investments, more fund investments and it goes back as philanthropy. My sticking point has always been, if we and Latinos want to change the course of us in America, of our political power, of everything that we say is wrong of," Oh, there's is enough money going to Latinos." Then we have to be the ones that are... the change because if our dollars go into philanthropy and if our dollars go into angel investments, to other Latino founders and we start recycling the capital, then we have the power with our dollars.

Elias Torres: Yup, and that's a whole another topic, which is, I just came from Tampa. I donated a whole bunch of money. I helped transform the scholarship that I was a part of, that I received to reach a new level has never reached before, and it wasn't just myself but harnessing the community. The community, the Latino community is not used to giving. So they're not used to asking, they're not used to taking the risk. They're not there fiscally conservative. Then, we tend to only give to the church mostly and not to help other parts of the community as well that need it. So we are going to work on that. And that's what this is about, and maybe we should just talk more again. I think we're already like at 15 minutes. Usually people get tired by 30th and we got to put a signal to people to listen to the end because the second half was also extremely valuable, right? It's like, what you laid out here is everybody should be setting as their life goal, as their next immediate milestone to go become an accredited investor, to have the option to invest in funds, in VC, because that's the one that has the highest returns, and even if it takes 10, 15 years, when that hits, maybe it's not going to be for you, but it's going to be for your descendants. That's something you can leave behind as opposed to like CD or money order.

Adrian Mendoza: Exactly, because we made money because of being in that ecosystem. I'm where I'm at because we participated in... and both of us raised venture capital. As people talk bad about it, it's like, we're here because of it. We're here because we raised VC money. We raised PE money. We got ingratiated into that world and learn through that process. For me, you are completely right. The path should be, how do I get to an accredited investor? How do I get to participating in the wealth generation and what I'd say at every podcast, and you'll hear me say this. I said this in a few others, if there's no one that allows you in because of the color of your skin and who you look with and your gender identity, and if you're black or you're Latino or you're women, I'm here. This is why I'm doing what I'm doing. I'm not here to just help founders of color. I'm here to help Latinos who want to invest in private equity and venture, where they're learning, investing. If you want to reach out to me, reach out to me. If you say Adrian," I want to participate."

Elias Torres: We cannot talk to everybody, but we're laying it out here, and what I tell people is go listen to this podcast and come back to me and tell me what things have you done to become an accredited investor? What is your plan? We just laid it out here. We're telling people something that most people don't even know is the thing in the world. Accredited investor, go figure that out and go get it done. When you come back, we don't have to explain the first step. Show me that you have the hustle. Not everybody has-

Adrian Mendoza: Absolutely.

Elias Torres: Thank you so much Adrian. This is awesome. It's something, we got to talk more to our community and to our people, of how do we break out and make our own generational wealth. So thank you so much for being on the show and we'll be talking more and we're going to figure out how to help our community.

Adrian Mendoza: Foreign language. Thank you for having me on.

Elias Torres: Thanks for listening to the American Dream Podcast. Make sure to hit subscribe, so you never miss when a new episode drops. If you like this episode, please leave a six star review, wherever you listen to your podcast, and if you're interested in learning more about my American Dream Mission, subscribe to my newsletter, linked in the show notes.

DESCRIPTION

"In this world outside of the Latino community, to the white world, everything's negotiable."

Adrian Mendoza is the Co-Founder and General Partner of Mendoza Ventures, an early and growth-stage fintech, AI, and cybersecurity venture fund that he founded after noticing no one in the startup world looked like him.

In this episode of The American Dream podcast, Adrian and Elias discuss why there are fewer Latinx seen in the startup world, how more Latinx can get into tech (and why they should), and why being an accredited investor is the next milestone everyone should be aiming for in order to experience at least middle-class wealth.

Key Moments:

  • (2:33) Adrian’s background
  • (3:23 ) Why it takes 6-8 generations for Latinos in the US to build wealth
  • (5:57) Why Latinos don’t ask for help & why we should
  • (17:22) Generational wealth requires Latinos to get up and leave
  • (28:35) Adrian’s advice on why everyone should be investing
  • (37:45 ) Why being an accredited investor is different than just putting money into an index fund
  • (45:52) The importance of the hustle
  • (50:31) Why your next milestone should be to become an accredited investor

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