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Study reveals key to increasing Black women tech founders: Startup employment

A groundbreaking new study in the Strategic Management Journal uncovers a powerful and practical strategy to address the longstanding underrepresentation of Black women in the tech startup world: working at startups before founding one.

Despite the surge in entrepreneurship across the U.S., diversity remains a critical challenge. While 71% of startup founders are white, just 6% are Black—and a mere fraction of that figure represents Black women.

In response to this disparity, researchers from Texas A&M University, Arizona State University, and the University of North Carolina at Chapel Hill examined how employment at a startup can pave the way for underrepresented individuals, particularly Black women, to become founders.

"Previous studies suggest that working in a startup increases one's likelihood of founding a company," says lead author Dr. Christopher G. Law, Assistant Professor of Management at Texas A&M. "We wanted to find out if this effect differs across demographic groups—and the answer is yes. In fact, it's especially powerful for Black women."

The research team—comprising Law, Travis Howell (Arizona State), Chris Bingham, and Sekou Bermiss (UNC Chapel Hill)—analyzed data from Venture For America (VFA), a nonprofit that places recent college graduates in startup roles through a competitive fellowship.

Using application data from over 8,000 individuals between 2013 and 2023, along with LinkedIn career tracking, the team identified clear patterns in startup-to-founder transitions.

Their findings show that individuals with startup experience are 91% more likely to start their own ventures. Even more striking, this effect was disproportionately high for Black women. Through interviews with 39 startup professionals—including 10 Black women founders—the researchers discovered why: the power of representation and exposure.

"Many of the Black women we interviewed never saw themselves as startup founders—until they worked at a startup," explains Bingham, Phillip Hettleman Distinguished Professor. "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."

The implications are profound. As Bermiss, Associate Professor of Strategy, notes, "Black women bring new ideas, questions, and goals to the table. Encouraging their entrepreneurial journeys isn't just a diversity win—it's an innovation win."

The researchers advocate for targeted policies and fellowship programs that connect Black women to early-stage startups as employees, laying the groundwork for future entrepreneurial leadership.

This approach not only empowers individuals but also enriches the startup ecosystem with fresh perspectives and untapped potential.