A transformative new study published in the prestigious Strategic Management Journal reveals a potent strategy to combat the persistent underrepresentation of Black women within the technology startup sphere: gaining employment experience at startups prior to founding one. This finding not only sheds light on a critical path to entrepreneurial leadership but also highlights the systemic barriers that minority founders face within the innovation ecosystem.
Despite a notable rise in entrepreneurial activity nationwide, racial and gender disparities in startup leadership remain stark. While the majority of startup founders in the United States are white, accounting for approximately 71%, only a small fraction—roughly 6%—are Black. Within this already limited subgroup, the representation of Black women is exceedingly scarce. This imbalance underscores the urgent need for actionable insights and strategies to foster more inclusive entrepreneurial environments that recognize and amplify diverse voices.
The interdisciplinary research team, consisting of scholars from Texas A&M University, Arizona State University, and the University of North Carolina at Chapel Hill, embarked on an extensive investigation into whether startup employment serves as a viable pathway to entrepreneurship for underrepresented groups, with a particular focus on Black women. Their inquiry was grounded in the hypothesis that firsthand experience within startups could provide crucial exposure, networks, and confidence that catalyze future founding endeavors.
Lead author Dr. Christopher G. Law, Assistant Professor of Management at Texas A&M University, elaborates, “Prior research established a correlation between working at startups and founding a venture later. Our study sought to discern how this dynamic varies among demographic groups. Remarkably, we found that the effect is significantly pronounced for Black women compared to other cohorts.” This pivotal revelation challenges conventional perspectives on entrepreneurial initiation and emphasizes the nuanced role of experience within minority entrepreneurship.
Central to the research methodology was the utilization of comprehensive data collected by Venture For America (VFA), a nonprofit organization operating a rigorous fellowship program that places recent college graduates in startup roles across the United States. The team analyzed over a decade’s worth of application and employment data from more than 8,000 individuals between 2013 and 2023, leveraging LinkedIn career trajectories to trace each participant’s professional evolution. This robust dataset enabled a detailed analysis of how early-stage employment influenced eventual transitions into startup founding.
Statistical findings from the study indicate that individuals with prior startup experience are 91% more likely to launch their own companies compared to those without such backgrounds. However, this increase is not uniform across demographics. Black women demonstrated an even higher propensity to translate initial employment into entrepreneurial ventures, highlighting a critical inflection point where exposure dismantles psychological and structural entry barriers.
Interviews with 39 startup professionals, including 10 Black women founders, provided qualitative depth to the data, revealing the mechanisms driving this effect. These narratives consistently emphasized the transformative power of representation and proximity. As Professor Chris Bingham from UNC Chapel Hill notes, “Many Black women we spoke with had never envisioned themselves as startup founders before working inside these companies. Witnessing founders in action demystified the process. It became clear that successful entrepreneurship involves navigating uncertainty and iterative learning rather than possessing perfect answers from the outset.”
This insight taps into a broader theoretical framework within entrepreneurial cognition and social capital theory, wherein exposure to role models and organizational cultures creates new schemas and expands perceived career possibilities. For Black women entrepreneurs, such exposure fosters self-efficacy and access to informal networks, facilitating the acquisition of knowledge critical for startup success, from fundraising to product development.
The implications of these findings extend beyond individual career trajectories, suggesting systemic avenues for policy interventions and ecosystem development. Sekou Bermiss, Associate Professor of Strategy and co-author, articulates that “Black women contribute innovative ideas and perspectives essential for solving complex business challenges. Supporting their entrepreneurial emergence is not only a question of equity but also a strategic imperative for broader innovation and competitiveness.”
In light of this evidence, the researchers advocate for targeted initiatives such as fellowship programs, accelerators, and incubators specifically designed to integrate Black women into startup environments as employees. Such initiatives could provide hands-on training, mentorship, and exposure, thereby creating fertile ground for future founders. These programs must address both the tangible and intangible barriers, including access to venture capital networks and visibility within entrepreneurial ecosystems.
Furthermore, the study underscores the importance of cultivating inclusive organizational cultures within startups themselves. By fostering diverse leadership teams and demonstrating inclusive entrepreneurial narratives, startups can serve as incubators for a wider range of founders who bring valuable divergent thinking and novel market insights.
Beyond the individual and ecosystem levels, this research contributes to the broader discourse on diversity and innovation within technology and entrepreneurship domains. It aligns with accumulating evidence that diverse teams outperform homogenous ones in problem-solving and creativity, thus emphasizing the economic and social value of inclusive entrepreneurial pathways.
The study’s comprehensive approach, combining quantitative data analysis with qualitative interviews, sets a methodological benchmark for future research in entrepreneurship and diversity. By illuminating the startup employment pathway as a critical lever, the research provides not only diagnostic clarity but also actionable direction for stakeholders across academia, policy, and industry.
For those interested in the detailed methodologies and full context of the findings, the complete paper is accessible in the Strategic Management Journal. This publication continues to be a leading platform for rigorous research that bridges strategic management theory and practical relevance, further amplifying the impact of studies like this on real-world challenges.
By spotlighting the startup-to-founder pipeline for Black women, this seminal study offers a blueprint for dismantling longstanding systemic barriers in tech entrepreneurship. It calls on the entire innovation ecosystem—investors, incubators, policymakers, and educational institutions—to recognize and nurture this underleveraged talent pool, paving the way for more equitable and dynamic economic growth.
Subject of Research: People
Article Title: From joiners to founders: Startup employment and underrepresented entrepreneurs
News Publication Date: 5-Mar-2025
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The study draws upon data from Venture For America fellowship application and employment tracking between 2013-2023, supplemented by interviews with startup professionals including Black women founders to triangulate quantitative findings.
Keywords: Entrepreneurship, Technology, Diversity, Startup Employment, Underrepresented Entrepreneurs, Black Women Founders, Venture For America, Innovation, Social Capital, Startup Ecosystem
