Celebrating Latino Business Leaders and Expanding the Segment
- Keywords:
- business strategy
Latinos may be the largest minority group in the United States, but you wouldn’t know it by looking at the composition of the C-suite at the largest companies across the nation. A decade ago, just two Latino CEOs were overseeing Fortune 500 companies – today, just 14 hold a top office. Although representation has improved, much more work needs to be done.
To help remove barriers to inclusion and expand our business in one of the fastest growing segments in U.S., BMO’s Economic Equity Advisory Group partnered with Latino Leaders magazine to rank Latino-owned businesses in the U.S. by revenue. The Latino Leaders Index500, Powered by BMO, aims to help better understand the needs of this important segment of the economy. Today, these companies account for more than US$134 billion in annual combined revenue and the overall Latino GDP is estimated at US$3.2 trillion in the U.S. making it the fifth largest economy in the world*.
On August 5, we honored many of those leaders in New York. At the event, I had the opportunity to sit down with Marcelo Claure, a globally recognized entrepreneur, investor, and Founder & CEO of Claure Group. As one of the early Latino leaders to break into the C-Suite as CEO of Sprint, I wanted to share Claure’s perspective on his experience as a Latino entrepreneur and where he sees opportunities.
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The path to success
Claure has an impressive track record of turning around businesses and orchestrating highly complex, multi-billion-dollar deals. He’s also sparked an ambitious plan to give phones and computers to underprivileged children to help them gain access to the internet. As impressive as his credentials are, what struck me most about our conversation was his early days as a budding entrepreneur.
Before running one of the largest carriers in the country, Claure was selling phones out of the trunk of his car and aspiring to be included in the original Latino Leaders ranking. When he sold his company, he more than achieved his dream, elevating his company to become one of the world’s largest mobile phone distribution businesses, selling one of every six phones in the world, with distribution agreements with Apple and Motorola.
Although the life of an entrepreneur is hard, being Latino added additional obstacles, particularly when it came to raising equity. “When I had to go raise money, we were already a billion-dollar company, but it’s incredibly hard to raise money when you’re Hispanic,” he said.
Claure experienced this firsthand. While his competitors would trade at high multiples, some bankers said he should be willing to accept a lower valuation. “It was painful,” he said. “People can’t believe your story of how you grow this multi-billion-dollar business,” he explained. Fortunately, he found the right financing partner to help him grow.
To help spare other Latinos that experience, when Claure was COO of Softbank Group, he founded the Open Opportunities Fund, a venture capital firm focused on backing Black- and Latino-founded tech companies. “Nothing gives me more pride than seeing Latino entrepreneurs thrive,” he said.
Identifying leaders
Today, Claure heads up his own investment company. Rather than take on another CEO role, he said his focus is now on using his experience to support other leaders. “I want to be able to invest my capital, my relationships and my experience into different CEOs, young entrepreneurs or CEOs where I believe I can help change the trajectory of their business,” he said.
Claure’s experience working his way up has shaped the way he looks for companies to invest in. “I like to invest in people who are thinking more about the future,” he told the packed room of Latino leaders. “My best investments are in businesses run by leaders who were operators at one point in time, who actually understand the essence of a business and what makes a business successful.
Another lesson he’s learned over his career is the importance of surrounding yourself with a great team. In his view, the worst-performing investments are those where everything depends on an individual.
Apart from supporting Latino leaders, Claure is passionate about artificial intelligence (AI) and the potential ways it can impact society. “I believe that AI is the biggest revolution in our history,” he said. “The next 10 years are going to be more disruptive than the past thousands of years combined.” In Claure’s view, no company or industry will be spared.
“I’m investing in things that I’m passionate about and are going to basically change the world,” he said. “It’s fascinating to see the speed of change and it’s fascinating for me to interact with entrepreneurs who remind me who I was 30 years ago.”
Breaking down barriers
Like Claure, BMO promotes equal access to opportunities that enable growth to help customers, colleagues, and the communities we serve. One of the ways we’re achieving this goal is through BMO EMpower 2.0, our more than $40 billion community benefits plan to help Latino business owners gain better access to capital, educational resources, and meaningful networking opportunities.
*According to The Official 2023 LDC U.S. Latino GDP Report™ by Latino Donor Collaborative.
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Speaker 1:
Welcome to Markets Plus, where leading experts from across BMO discuss factors shaping the markets, economy, industry sectors, and much more. Visit Bmocm.com/Marketsplus for more episodes. The views expressed Here are those of the participants and not those of BMO Capital Markets, its affiliates or subsidiaries.
Eduardo Tobon:
Hola, I'm Eduardo Tobon Latino segment head of BMO Commercial Bank. Today's episode is going to take a deep dive into the Index500 of the largest Latino-owned companies, which is a snapshot of the power of the Latino business owners in the United States.
In 2023, BMO's Economic Equity Advisory Group partnered with Latino Leaders Magazine to rank 200 such companies with a plan to expand the list to 500 companies in 2024. And that is how the Index500 platform was born as a collective desire to showcase the most prominent companies in the United States with the majority ownership from Latinos according to annual revenue. This platform immediately indicated the business power and entrepreneurial spirit of hundreds of successful families and individuals, across multiple generations in many cases, who are proud of their origin and have their headquarters located in any of the 50 states. These companies display the diversity of industries at which Latino business acumen is growing and setting the standard for future generations.
Today I have the privilege of introducing our episode with Alan Tannenbaum CEO of BMO Capital Markets and Marcelo Claure, globally recognized entrepreneur, investor and founder and CEO of Claure Group, who sat down together at our recent Index500 event in New York City to discuss the remarkable achievements of Latino-owned businesses, and much more. [foreign language 00:02:04]
Alan Tannenbaum:
Please everybody join me in welcoming Marcelo. Thank you Marcelo, for joining us in what is an important event tonight. And I want to thank my colleagues, Eduardo and others, who've really made this happen and put together this initiative, which is a reflection of the commitment that we have as a bank to the Latino community. It's a long-standing deep relationship and reflected in so many of the communities that we serve in the Midwest, in the Northeast, and now very importantly for us on the West Coast, particularly around the Los Angeles area. So this is a community that is critically important to us. I also, very importantly, Marcelo, want to thank you for investing the time and giving this group some access to your experience, and I know there are a lot of fans out here of yours.
So with that, I'm going to dive in. Marcelo, one of the things that you have to hear in this room really resonated with me is the dynamic around entrepreneurship and how many of the people and companies are so close, either first, second generation immigrants who've been involved in building and growing businesses. Let's talk about your experience in that regard. Go back. Where was your formative experience in building, growing businesses? What was that like for you when you started out?
Marcelo Claure:
Well first, thank you. BMO has been an incredible partner in this new life that I'm leading. But I could not be more excited when I saw the Latino Leaders Index because this resonates a lot with my life. My first company, Brightstar that I started selling phones from the back of my car in 1997. I borrowed money from my father, and I think a lot of you relate that story, how it's hard for us to raise money. So I borrowed $270,000, which was all my dad's savings after he paid for education in the US. And I think the fear of failure of eating into my father's savings made us work extremely hard.
One of my biggest dream is that I want to become the largest Latino owned business in the United States. It grew to be not only the largest Hispanic owned business, but the world's largest distribution company in my industry. We ended up operating in 70 countries, so revenue was $11 billion. As an entrepreneur, there's nothing more rewarding than being recognized by your own people. And I think the Latino community is an amazing community in this country. I think Latinos we're gifted. I always say we're lucky. Some people say it's so hard to be a Latino entrepreneur. I think it's very easy to be a Latino entrepreneur in the United States because we have the best of both worlds. We can be as American as we want to be but we can be as Latinos we want to be, and our ability to interchange our cultures interchange of knowledge, I actually think it's a competitive advantage. Where a lot of people have recognized at the beginning the power of this country where you start from nothing and if you put a lot of hard work, perseverance and have big dreams, pretty much the sky's the limit.
Alan Tannenbaum:
It's an amazing journey. And I'm curious, as you think about that, were there elements or times where you felt that being Latino was an obstacle for you, that you felt that you had to overcome, whether it was lenders or clients or customers, whatever the dynamic was? Where did you or did you experience any dynamics where you felt that that was an issue?
Marcelo Claure:
On the good side, I was very lucky to have a bank that believed in me at the beginning, it's a small bank, and I became their largest customer to a point that I think we broke all limits that they were allowed to lend to me, and they were incredibly... That was a great partner.
But I think this really hits me, was when I had to go raise equity. And Brightstar was such an incredible success story that I think in our fourth year, we already had a billion dollars in sales. But when I had to go raise money, we were already a multi-billion dollar company. And even though people don't want to say it's incredibly hard to raise money when you're Latino, when you're Hispanic. I experienced that myself, and I was lucky enough that I was able to raise hundreds of millions of dollars and Brightstar ended up being a tremendous success story. But it was painful. And we tried to hide it, and we try to say that's not true, but it actually does happen.
To the point that it bothered me so much that while I was at SoftBank, I started a fund called the Open Opportunity Fund because I don't want anybody else to go through what I went through, which was super, super hard. And the Open Opportunity Fund, so far so good, is a top quartile fund. BMO is a partner in the next fund that we're launching. And nothing gives him more pride than to see Hispanic entrepreneurs thrive. And we have so many amazing stories.
So the beauty of it is I think we're more resilient than everybody else. I think we just don't give up. I think we have this fear of failure that it allows us to just push forward and continue to go. But I'd be lying if I didn't say that it was hard to raise money as a Hispanic entrepreneur at the beginning.
Alan Tannenbaum:
First, I'm sure your experience resonates with many people in the room, and as Eduardo mentioned, as an immigrant myself, I'm not sure that people who do not come from that experience either themselves or through their parents or grandparents, can really appreciate what that's like. So fast-forward, how do you get to be the CEO of one of the largest companies in America?
Marcelo Claure:
I'm a huge believer, and all of you have experienced this and those are the inflection points that we hit in our lives, that moment of luck or that person that you meet in the most unexpected place. I think the difference between a lot of entrepreneurs are they find that opportunity and then you jump at it and most people don't. 99% of people, that opportunities will cross and they decide to stick and continue their comfortable life. And I've been very lucky. My first job that I got was the president of the Bolivian Soccer Federation, the vice president, because I met somebody in the plane that actually convinced me to join him, and we took Bolivia to the World Cup in the first time in my country's history.
The second business that I bought, I went to a cell phone store to buy a cell phone, and [inaudible 00:08:18] Venezuela wanted to get rid of, so he sold me 50% of his business with no cash. I went to walk his store, I ended up buying a small company.
And my third one know Brightstar, that I actually started because I knew we needed it. But it's a funny story. I was at a trade show in Barcelona and somebody canceled a meeting that they had with me. So I walked outside and this Japanese guy comes next to me and we start talking, and I tell my story. He says, oh my God, you have to meet my boss, Masa. He's going to love you and you're going to love him. And for the next few months as I was traveling around Asia, I took message to this famous Masa who was the CEO of SoftBank, because he finally gave me a meeting and we actually hit it off and we became really good friends, and he gave Brightstar some business in Japan. That's how we opened Brightstar Japan.
But then he decided to make was probably the largest Japanese investment in the United States, and he bought Sprint. Sprint was losing $5 billion a year, and he had been losing $5 billion a year for the last five years. And he invited me to be in the board. And then he looked at me and he says, "What are we going to do?" I said, "Well, I'm in the cell phone business. I know a lot of the great CEOs. Why don't I hire you, a great CEO, and let's try to fix this company?" And then Masa looked at me and he said, "I have a better idea. Why don't you become CEO of Sprint?" And I said, "That's way above my pay grade." I said, "No." He said, "You're a street fighter like me."
And I thought he was kidding. And I said, "Nah, whatever." He said, "No, no." I said, "[inaudible 00:09:46] you can't. I own this huge company called Brightstar. It is the world's largest in what we do. It's the largest Hispanic owned business." He said, "No." He said, "At 5% I buy it from you to become the CEO of Sprint."
And I was shocked, right? So first, I love my life in Miami, so I said, "Do I have to move to Kansas City?" He said, "That'll be a good idea." So I remember calling my wife that night and I said, "Good news or bad news?" Every wife is always going to tell you bad news first. I said, "Bad news. We're moving to Kansas City." She's like, "Wow." She said, "What are the good news?" I said, "We're rich." I said, "I just sold my company." And that's how I went to Sprint. And it was great. It was 120 year old company. Every single American knew about Sprint. It's going to be very cool to go run a public traded company. I said, whatever, where's it going to go in and figured this thing out.
And then I read and I said, look, there's only two Fortune 100 or Fortune 500 CEOs at that time, Oscar Munoz, who was the CEO of United and myself. And I said, God, what an amazing opportunity that if I do a good job, I said, maybe there's going to be other Hispanic CEOs to be given the chance to run an iconic American company. And I can never forget landing in Kansas City, it's actually 10 years as of today. So it was funny that I'm here. And the faces of everybody there when they saw me and they listened, and I said, "Don't worry. You're going to get used to my accent and we're going to figure this together." And it was probably one of the most remarkable turnarounds. Probably the turning moment in our turnaround a lot of people remember the famous, can you hear me guy now from Verizon. All of you grew up, can you hear me now? And Verizon actually didn't want to use that guy anymore for various reasons. So we convinced him to switch. In Verizon's contract, they didn't have an non-compete. And I still remember that day when this guy showed up in 2016. I said, look, it's 2016. Used to be the Verizon can you hear me guy? Now I work for a Spring now because the network is better, the price is better. And then our sales went through the roof and it was a fantastic thing.
But it wasn't enough. We used to have a big competitor called T-Mobile. And actually we convinced T-Mobile to merge with us. And everybody said that it was impossible to create a merger in the United States when you were merging number four and number three. But I actually moved to DC just to understand what would it take. I had the honor of being in three congressional hearings, being grilled by those guys, not fun. Against all odds we got the merger approved. But what's beautiful is now the combined company, Sprint and T-Mobile is the world's most viable telecommunications company. I take a lot of pride of having put together two companies who were the two strugglers to AT&T and Verizon. And if you fast-forward today, today there's 14 Hispanic CEOs. So that's great. 14 out of 500, better than 2 out of 500. And we have more Hispanic board members in Fortune 500 companies than we've ever had before.
So I think we're moving in the right direction. My personal opinion, not fast enough. But hey, we're taking steps in the right direction. As long as we're better today than we're yesterday, I think it's a great accomplishment.
Alan Tannenbaum:
No, that's amazing. Always the underdog. So now shift a little bit Marcelo and talk about, now you've got some money in your pocket. You're a CEO of a very large company. You have the ability to affect change. You have the ability to impact people's lives on a much broader scale. How do you start to get involved in the community? How do you start to think about how do you help others who are in the same position as you, who are striving, who are immigrants, who are Latino? When does that, and how does that become a part of your life?
Marcelo Claure:
So probably the biggest thing that I wanted to do for Latinos was while I was at Sprint, it bothered me what I call the homework divide. And that is in the US there used to be about 5 million families who didn't have internet access at home. And that's a problem because our kids are given homework in which you have to have internet. So what happens is these kids don't have internet at home, and it just drove me crazy that we could fix a problem. And you will never expect that a country, what we call the US a first world country, will have a problem like that. So while I was a Sprint, I called the CEO of Apple, I called the CEO of Samsung. I said, "Why don't we do something different? Why don't you give me every single used iPhone or every single used laptop, and I will provide free internet access?" And we call it the 1Million Project, and we basically gave away a million free computers with unlimited internet usage as long as you could prove that you were underserved. And 80, 85% were given to Latinos and Blacks.
So when we did the merger, T-Mobile said, what an amazing opportunity to increase this. And we actually increased the 1Million Project to be a 5 million project, and now a 10 million project. This is one of the few problems that we've solved today. Any kid that doesn't have the means to pay for internet is given a free device with a free internet access. And then we've run a whole bunch of studies and the amount of lives that we've saved our kids and now go to college because we were something so simple as that. In a country like the US. And again, half of these machines and half of these free devices were going to Hispanics. And I could not find a better way to utilize, I was privileged to be running a public company size of Sprint, and I was privileged to have friends at Apple and Samsung and Compaq and Dell and some others that provide the free devices. And that was probably, I would say, one of the biggest contributions of helping a community.
Whenever you're doing good stuff, the world has an incredible way to pay you two times or three times or four times what you do.
Alan Tannenbaum:
It's amazing. As you say, if you do good, good things happen. It's great to hear. Shifting again, talk about what you're doing today, where you're investing, you've now got this new business, whether it's technology, AI, healthcare. Where are you seeing opportunity? What's attractive to you? Where are you spending your time and energy and putting your dollars to work?
Marcelo Claure:
Yep. I started my own investment company, and now we manage our own money, which is a blessing, and we are pretty diversified in areas that I'm incredibly focused or passionate about, more importantly, is I don't want to take a new CEO job. I don't want to run one thing. I want to be able to invest my capital, my relationships, and my experience into different CEOs, young entrepreneurs or CEOs where I believe I can help change the trajectory of their business. And that way, I think you can create an exponential effect where you're not just focused on one thing, but I think we have something like a hundred and something investments in a very short period of time.
I'm passionate about AI. I believe that AI, it's the biggest revolution in our history. I think the next 10 years are going to be more disruptive than the past thousands of years combined. I believe AI will disrupt every company, every industry, every function. So I'm investing in companies that are leveraging AI.
I'm investing a lot in climate. If you believe what people say that by 2050 we're going to get to net-zero emissions. You need $150 trillion to do that, which means $6 trillion a year for the next 25 years. That's bigger than any other asset class.
I'm investing in longevity. I am a huge believer in the advances in medical science that we have today that would allow our kids to live over a hundred years being the norm. And there's enough technology that shows that's going to happen.
I am investing a lot in what is going on in terms of the change in supply chains. So I'm investing in things that I'm passionate about and things that are going to basically change the world. And fascinating to see the speed of change. And it's fascinating for me to interact with entrepreneurs who remind me who I was 30 years ago.
One of my most important job that I have now is I'm a father of six. I have from 28 to 5 years old. And those are my six most important projects that I have. And I hope that I'm going to be able to raise kids who are, more importantly, good human beings, that are happy, that are purposeful, and are able to leave the world in a better place than when they came in. So hopefully I'm going to do a good job as a father, maybe as good as an entrepreneur. That's my biggest mission in life. Now.
Alan Tannenbaum:
Marcelo, you're a role model to so many Latinos, not just here, but all over the world, given the roles that you've had, but that is underselling you because you're a role model to many people, not just Latinos. So thank you for sharing your thoughts, your experiences, your wisdom, and for being such a great partner to us and giving back by being at events like this. So thank you, my friend.
Marcelo Claure:
Thank you. Thank you. Thank you.
Speaker 1:
Thanks for listening. You can follow this podcast on Apple Podcasts, Spotify or your favorite podcast app. For more episodes, visit bmocm.com/marketsplus.
Speaker 5:
For BMO disclosures, please visit bmocm.com/podcast/disclaimer.
Alan Tannenbaum
CEO & Group Head, BMO Capital Markets
Alan Tannenbaum was appointed CEO & Group Head, BMO Capital Markets in November 2023. In this role he is responsible for BMO's interactions with corporate, …(..)
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Eduardo Tobon
Latino Segment Head at BMO
As a dynamic senior advisor and business leader, Eduardo brings to his clients a broad background in financial services plus a track record with a network of talent…(..)
View Full Profile >Latinos may be the largest minority group in the United States, but you wouldn’t know it by looking at the composition of the C-suite at the largest companies across the nation. A decade ago, just two Latino CEOs were overseeing Fortune 500 companies – today, just 14 hold a top office. Although representation has improved, much more work needs to be done.
To help remove barriers to inclusion and expand our business in one of the fastest growing segments in U.S., BMO’s Economic Equity Advisory Group partnered with Latino Leaders magazine to rank Latino-owned businesses in the U.S. by revenue. The Latino Leaders Index500, Powered by BMO, aims to help better understand the needs of this important segment of the economy. Today, these companies account for more than US$134 billion in annual combined revenue and the overall Latino GDP is estimated at US$3.2 trillion in the U.S. making it the fifth largest economy in the world*.
On August 5, we honored many of those leaders in New York. At the event, I had the opportunity to sit down with Marcelo Claure, a globally recognized entrepreneur, investor, and Founder & CEO of Claure Group. As one of the early Latino leaders to break into the C-Suite as CEO of Sprint, I wanted to share Claure’s perspective on his experience as a Latino entrepreneur and where he sees opportunities.
Markets Plus is live on all major channels including Apple, and Spotify.
Start listening to our library of award-winning podcasts.
The path to success
Claure has an impressive track record of turning around businesses and orchestrating highly complex, multi-billion-dollar deals. He’s also sparked an ambitious plan to give phones and computers to underprivileged children to help them gain access to the internet. As impressive as his credentials are, what struck me most about our conversation was his early days as a budding entrepreneur.
Before running one of the largest carriers in the country, Claure was selling phones out of the trunk of his car and aspiring to be included in the original Latino Leaders ranking. When he sold his company, he more than achieved his dream, elevating his company to become one of the world’s largest mobile phone distribution businesses, selling one of every six phones in the world, with distribution agreements with Apple and Motorola.
Although the life of an entrepreneur is hard, being Latino added additional obstacles, particularly when it came to raising equity. “When I had to go raise money, we were already a billion-dollar company, but it’s incredibly hard to raise money when you’re Hispanic,” he said.
Claure experienced this firsthand. While his competitors would trade at high multiples, some bankers said he should be willing to accept a lower valuation. “It was painful,” he said. “People can’t believe your story of how you grow this multi-billion-dollar business,” he explained. Fortunately, he found the right financing partner to help him grow.
To help spare other Latinos that experience, when Claure was COO of Softbank Group, he founded the Open Opportunities Fund, a venture capital firm focused on backing Black- and Latino-founded tech companies. “Nothing gives me more pride than seeing Latino entrepreneurs thrive,” he said.
Identifying leaders
Today, Claure heads up his own investment company. Rather than take on another CEO role, he said his focus is now on using his experience to support other leaders. “I want to be able to invest my capital, my relationships and my experience into different CEOs, young entrepreneurs or CEOs where I believe I can help change the trajectory of their business,” he said.
Claure’s experience working his way up has shaped the way he looks for companies to invest in. “I like to invest in people who are thinking more about the future,” he told the packed room of Latino leaders. “My best investments are in businesses run by leaders who were operators at one point in time, who actually understand the essence of a business and what makes a business successful.
Another lesson he’s learned over his career is the importance of surrounding yourself with a great team. In his view, the worst-performing investments are those where everything depends on an individual.
Apart from supporting Latino leaders, Claure is passionate about artificial intelligence (AI) and the potential ways it can impact society. “I believe that AI is the biggest revolution in our history,” he said. “The next 10 years are going to be more disruptive than the past thousands of years combined.” In Claure’s view, no company or industry will be spared.
“I’m investing in things that I’m passionate about and are going to basically change the world,” he said. “It’s fascinating to see the speed of change and it’s fascinating for me to interact with entrepreneurs who remind me who I was 30 years ago.”
Breaking down barriers
Like Claure, BMO promotes equal access to opportunities that enable growth to help customers, colleagues, and the communities we serve. One of the ways we’re achieving this goal is through BMO EMpower 2.0, our more than $40 billion community benefits plan to help Latino business owners gain better access to capital, educational resources, and meaningful networking opportunities.
*According to The Official 2023 LDC U.S. Latino GDP Report™ by Latino Donor Collaborative.
This is part 2
of a
4-part series on
Latino Leaders Index500, Powered by BMO
PART 1
The Power of Latino Business Owners in the United States
Eduardo Tobon | August 09, 2024 Markets Plus
BMO is extremely proud to contribute to the growth of the Latino Leaders Index500, Powered by BMO, and to continue our relationship with Latino Leade…
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On the Success and Entrepreneurial Spirit of the Latino Community
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If Latinos in the U.S. were a separate country, they would rank as one of the largest economies in the world, with a GDP of more than US$3 trillion.1…
PART 4
Empowering Latino Businesses: Lili Gil Valletta in Conversation
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Lili Gil Valletta never envisioned becoming an entrepreneur, but when she couldn’t find a company that could deliver the type of business intel…
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