esm7i Tony Aguilar, the founder of the mobile app Startup, learned how to identify and counter natural biases to raise funds for his app.
A Stanford GSB survey of over 5,000 business owners found that Latinos often face discrimination in obtaining financing. Stanford Business interviewed these four business owners. This is their story.
Tony Aguilar opens, in a new window, chose Indiana University over Ivy League colleges to keep a low profile when he left Pecos in Texas to attend college 15 years ago. Despite having a confident father, Aguilar was unsure of his place in the world.
He recalls, “I was the first-generation high school graduate, and I dressed and looked very different from most of my peers.” “I went where I thought I would fit in.”
Aguilar is a man who can fit into almost any situation today. Aguilar is the 33-year-old founder of Austin’s Chipper, an app that lets student loan holders manage, pays, and refinance all their debts in one place. Aguilar feels that investors sometimes perceive him negatively, even though his company operates 150 million dollars in student loans.
He says that raising financing has always proven to be a difficult task. Many VCs are predisposed to how you dress or look. These are natural prejudices. It’s very frustrating.
Aguilar, the founder and former CEO at Student Loan Genius – the first student loan benefit that allowed companies to assist employees in paying down their student loans – launched Chipper in 2018 after his company was selected by venture capital firm 500 Startups to be one of 16 out of 2,500 startups in the world to take part in “Batch 23”, the firm’s accelerator event.
Aguilar explains that the company raised $1 million during its pre-seed phase. Dan Macklin was one of the early investors in the round. He is a Stanford MSx graduate and cofounder at SoFi, the largest student loan refinancing company. Fabrice Grinda was the Forbes No. The world’s number one angel investor is Fabrice Grinda.
Aguilar says that despite such endorsements, some VCs may approach a meeting for a minority CEO differently than they would otherwise. Aguilar came to this conclusion after reading the Study open in a new window from Harvard Business Review on the types of questions VCs ask male and female entrepreneurs — and the impact it has on the funding they receive. Women are more likely to be questioned about potential losses, while men of non-minority backgrounds tend to ask about potential gains. The research moved Aguilar.
He recalls, “It opened up my eyes.” I have experienced it as a minority, and it is something that I have discussed extensively with other founders of minority groups.
Aguilar says that entrepreneurs who can “flip” questions about possible losses into discussions about potential gains tend to raise more money than those who answer questions about potential losses.
He says that there can be a lot of bias in these conversations. “Now, if someone asks me a question in a negative tone, I respond lively. Knowing how to use such tactics is important, as you may not always be aware of what’s happening. It’s difficult for many entrepreneurs not to take it personally. This can cause them to doubt their abilities.
Aguilar credits persistence and outreach for his success in financing
He says that Latino men don’t ask for help. “But networking is extremely important. We tend to form cliques as Latinos. We stick together with other Latinos, and that’s not what we should be doing. Most of the VCs are white men who’re not all bad or biased. You need to open your network, ask for help and get into the same room as the people who can change the course of your business. It’s important to be aware of bias in meetings and to learn how to deal with it.
He adds, “If we are to impact the world, we must get in those pockets.” If they don’t like you, ask who they know that would be interested in your company. You will have more opportunities if you keep those doors open.
