“They gave me the playbook of unwritten rules of being a brown professional in a white-shoe world of investment banking. The same did not exist in Silicon Valley, so I wrote “The Underdog Founder”
In his groundbreaking book, “The Underdog Founder,” Edrizio De La Cruz, the co-founder of Arcus, offers a compelling perspective on the unique challenges faced by entrepreneurs of color and the keys to their success. As a visionary mind behind Arcus, Edrizio’s entrepreneurial journey has been defined by numerous obstacles, a narrative that resonates with many entrepreneurs of color.y.
Entrepreneurship at a Young Age
Edrizio’s entrepreneurship started at an early age by selling Guavas outside his home in order to afford groceries for his family. “ I used to sell pink ones for 25 cents and the white ones for 10 cents. And I used that to go to the grocery store and buy candles because electricity used to go out all the time.” At age 11 he moved to the USA to the projects in the south Bronx and faced gang violence and hardship. After dropping out of college and the airforce at age 19 to make ends meet, he became an airplane mechanic. After 6 years he returned to school working on Wall Street and getting his MBA at Wharton school of business. This transformational journey from selling guavas to studying at a renowned business school forms an integral part of Edrizio’s remarkable story which is a driving force in creating this book.
An Immigrants Unique Perspective
Edrizio’s unique perspective highlights that innovative startup ideas often stem from a deep understanding of specific problems. He emphasizes that immigrants, like himself, bring valuable insights into various challenges, enabling them to develop innovative solutions. Edrizio’s book advocates that to succeed as an underrepresented founder, you must leverage your unique experiences and insights into unaddressed problems. Edrizio, like many immigrants who come to the US, was constantly sending money back home, which is what sparked his idea to delve into that market. “Being an immigrant gave me unique insights into remittances, and the best way to come up with startup ideas is to have unique insights into a problem that most people don’t have”.
Challenges faced for Founders of Color
One of the prominent challenges highlighted in “The Underdog Founder” is the lack of access to capital. Edrizio points out that businesses owned by individuals of color face significantly higher loan denial rates, as revealed in a National Community Reinvestment Coalition report. In fact, black-owned businesses experience loan denial rates 2.5 times higher than their white-owned counterparts. This stark disparity in access to capital is a major hurdle for underrepresented entrepreneurs.
Another critical issue discussed in Edrizio’s book is the revenue gap. Research by McKinsey has shown that black-owned businesses generate lower revenue than their white-owned counterparts, even after adjusting for factors like education and experience. These disparities in revenue contribute to the underrepresentation of black and Latino households in entrepreneurship, with only 19% of these households owning a business, compared to 34% of white households.
“The Underdog Founder” also delves into the oversimplification of the term “immigrant” within the tech industry. Edrizio challenges the notion that all immigrants are viewed equally, noting that many funds primarily focus on affluent immigrants, leaving out those who do not fit their status quo. “There is a HUGE difference between the affluent immigrant (ie, European, Asian, white Latino) and the non-affluent immigrant (ie, cab drivers, agricultural workers); there are lots of funds that say they focus on immigrants, but they really mean the former not the latter. So I did not fit their pattern, and VCs are all about the pattern,” Edrizio Explains. He sheds light on the need for a more inclusive approach to support all immigrants in the entrepreneurial ecosystem.
Written by and for the Underrepresented Founder
“The Underdog Founder” addresses a significant gap in the entrepreneurial literature, where the experiences of underrepresented founders are often overlooked. Edrizio emphasizes the need for literature tailored to their unique journey, filled with insights and strategies to navigate the challenges they face. “The goal is to be that playbook and guide for my younger self, for the young Endrizio at 19 who was lost, who didn’t know how to take that first step, and didn’t know that it was possible. I want to reach that kid from east harlem, East LA, South Side Chicago who doesn’t think it’s possible and show them that it is possible. Not in spite of your circumstances but because of them. Your roadblocks in your way become the way,” Edrizio explains The book presents “seven key principles to rise above challenges,” offering guidance and inspiration to underrepresented entrepreneurs.
Re-Defining the American Dream
Edrizio’s perspective on the American dream introduces a refreshing viewpoint that emphasizes breaking socio-economic and psycho-economic cycles Breaking socio-economic and psycho-economic cycles means that you’re not only in a higher income level than your parents but that you’re much more educated about wealth creation than your parents. So if a person wins the lotto, but doesn’t learn anything about wealth creation, then that person did not achieve the American dream, because they’ll likely waste all their money”. To this end, Edrizio has launched the Fenix coaching program, designed to help founders from all backgrounds launch their startups faster, increase sales, and improve fundraising efforts.
While Edrizio’s commitment to education is commendable, the book recognizes that disparities in access to quality education persist for entrepreneurs of color. These challenges extend beyond personal efforts and require comprehensive policy changes, affirmative action, and a broader societal commitment to equity to address deeply ingrained socio-economic and racial disparities.
Edrizio’s remarkable journey, from selling guavas in the Dominican Republic to co-founding Arcus with his partner Iñigo Rumayor, showcases his expertise in building a startup from the ground up, even when the playing field is far from level. Arcus’ acquisition by Mastercard in 2021 and its subsequent authorization as an Electronic Payment Funds Institution by CNBV underscore Edrizio’s significant impact in the fintech industry.
In “The Underdog Founder,” Edrizio De La Cruz provides invaluable insights, strategies, and a fresh perspective to empower underrepresented entrepreneurs on their journey to success, while also shedding light on the systemic changes necessary to create a more inclusive entrepreneurial landscape. His book, having reached#1 bestseller in the U.S., Mexico, Colombia, and the Dominican Republic continues to inspire and motivate the next generation of founders of color.