As California dominates AI and new business creation, Latino entrepreneurs are emerging as one of the state’s strongest — and most underfunded — economic engines.
Despite years of headlines predicting a tech exodus, California remains the country’s most powerful startup state — and Latino entrepreneurs are increasingly shaping what that growth looks like.
Over the past 15 years, Latino-owned businesses in California have grown 44%, reaching roughly 807,000 self-employed individuals by 2022. By 2023, Latino-owned firms exceeded 465,000 statewide, even as the total number of non-Latino businesses declined nationally, according to analyses cited by the UCLA Latino Policy & Politics Institute.
That growth is unfolding alongside California’s broader startup dominance. In 2023 alone, the state recorded about 278,000 new business applications, driven largely by service-oriented firms and remote work, according to KTVU. California now ranks 10th best in the nation for starting a business, per the Uken Report, undercutting claims that founders are abandoning the state.
Latinos Growing Businesses Inside a High-Capital Economy
Latino entrepreneurship is not confined to traditional sectors. Research from UCLA and the Stanford Latino Entrepreneurship Initiative (SLEI) shows increasing Latino participation in professional, scientific, and technical services, alongside strong growth in construction, transportation, and creative industries.
The economic impact is local and measurable: one Latino-owned microbusiness generates an average of seven jobs in its county, according to UCLA researchers.
Latina entrepreneurs, in particular, have played a central role. California is home to more than 21,000 Latina-owned businesses, representing 24% of the national total, SLEI reports. Much of that growth accelerated during the pandemic — but access to capital remains a major constraint. Latino-owned firms are 22% less likely to pre-qualify for loans, and 63% of Latinas rely on personal savings, limiting their ability to scale.
Startup Capital Is Flowing — Just Not Evenly
California’s startup machine continues to attract enormous capital. In early 2025, over 68% of U.S. AI funding flowed to Bay Area companies, with California holding 15.7% of all U.S. AI jobs. From Q3 2024 to Q2 2025, Bay Area firms captured 51% of national AI startup funding, concentrated in healthcare, robotics, and drone technologies. Overall, California-headquartered companies raised about $94.5 billion in the first half of 2025, according to Crunchbase News.
Yet researchers and groups like the Latino Community Foundation argue that without language-accessible financial training and alternative credit pathways, Latino founders risk being locked out of the very economy they help power.
California still leads the nation in startups. The question is whether its financial systems will fully recognize — and invest in — the entrepreneurs driving its next chapter.
Why Venture Capital Keeps Missing Latino-Led Startups
