This Is The Surprising Key To Increasing Black Female Startup Founders
Black women who work in startups are more likely to become founders later on, a new study has revealed, highlighting a potential key path to increasing their representation in the startup world.
Black women are already leading the way in entrepreneurship. A LendingTree study found that Black-owned businesses are more likely to be led by women, and 55.2% generate between $100,000 and $999,999 in annual revenue, slightly higher than the 54.7% for all Black-owned businesses.
Although the number of Black-female founders in the US is increasing, they still make up a small percentage. 71% of startup founders are white, just 6% are Black, and Black women make up a fraction of that, according to Phys Org.
The power of working at a startup
To tackle this gap, researchers from Texas A&M University, Arizona State University, and the University of North Carolina at Chapel Hill conducted a study examining how employment at a startup can encourage people from diverse backgrounds, particularly Black women, to become founders.
Previous studies have found a link between working in a startup and founding a company, according to lead author Dr. Christopher G. Law, Assistant Professor of Management at Texas A&M. “We sought to determine if this effect varies across demographic groups—and the answer is yes. It’s especially powerful for Black women,” he said.
The findings
The research team, which comprised Law, Travis Howell (Arizona State), Chris Bingham, and Sekou Bermiss (UNC-Chapel Hill)—analyzed data from Venture For America (VFA), used application data from over 8,000 individuals between 2013 and 2023, as well as LinkedIn career tracking to identify distinct patterns in startup-to-founder transitions.
The findings highlight that those with startup experience are 91% more likely to start their businesses. After interviewing nine startup professionals, including 10 Black women founders, the study highlighted that the effect was significantly higher for Black women, and it’s primarily attributed to representation and exposure.
“Many of the Black women we interviewed never saw themselves as startup founders—until they worked at a startup,” Bingham, Phillip Hettleman Distinguished Professor, said.
“Seeing founders up close helped dismantle psychological barriers. It wasn’t about having all the answers—it was about realizing those leading startups were just figuring it out too,” he added.
The researchers emphasize specific policies and fellowship programs that promote future entrepreneurial leadership for Black women in the early stages of their careers.
Image: Krystal Wilson
