I run Breaking the Blueprint, a HubSpot Blog column dedicated to the unique challenges and opportunities of underrepresented business owners, so I know that minority groups face a unique set of challenges in accessing the resources they need to succeed, especially when that access is already limited.
It’s unfortunate because diversity actually leads to positive business growth: Companies that are more diverse and inclusive are 35% more likely to outperform their competitors.
In this piece, I’ll share insight from experts about why diversity is so important in entrepreneurship, as well as stats that show the current entrepreneurship playing field for people of all backgrounds and the benefits that diversity brings.
The Importance of Diversity in Entrepreneurship
Entrepreneurship is a gratuitous opportunity for those who pursue it. It gives people control over their futures and the opportunity to pursue their passions.
In addition to the personal traits of entrepreneurs that contribute to success, there are also a number of external factors that contribute to one’s likelihood of creating and running a profitable business (like economic resources) that aren’t equally accessible to everyone who desires to pursue entrepreneurship.
A diverse workforce, however, is a better workforce. It drives business growth, generates revenue, and creates a landscape of diverse ideas and perspectives. I asked a diverse group of entrepreneurs for their opinions about why diversity in entrepreneurship is essential and compiled their insight below.
Entrepreneurship Trends Report
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- 92% of entrepreneurs have no regrets about starting their business.
- 61% find customers through powerful word-of-mouth referrals.
- 37% of entrepreneurs are targeting higher ARR in the next year.
- And more trends!
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A diverse workforce uplifts a wide range of perspectives and expertise.
Linn Atiyeh, CEO of Bemana, told me, “Being a woman in the industrial and equipment sector has typically been a lonely and sometimes discouraging position, but that‘s changing, and I’m happy to say I play a role in the shift.”
She adds, “As a recruiter specializing in the field, I‘m able to see the unique capabilities women bring to the sector and can push for their placement in roles that used to be heavily defined by men. A male-dominated recruiting firm isn’t incapable of doing this as well, but it's unlikely due to differing lived experiences.”
A diverse workforce meets the needs of a diverse customer base.
“First off, having diverse entrepreneurs means we can better meet the needs of all kinds of customers. When there isn't much diversity among business owners, products and services often miss the mark for a lot of people,” says Alex Adekola, CEO and Founder of Ready Adjuster.
He gives a great example of how this plays out in the beauty industry: “Think about ‘skin-tone’ products in the past—they mostly catered to Caucasian skin tones, leaving folks with different complexions out in the cold. But when we have entrepreneurs from different backgrounds, they bring their own unique perspectives and ideas. This leads to products and solutions that really hit home for a wider range of people.”
He says that when entrepreneurs share the same background as their target customers and understand their unique needs and challenges, they can create products that make a difference because they reflect their customer base.
Diversity funds business growth and innovation.
Diversity is profitable, and it’s why Elsie Achieng, Director of Acquisitions and Paid Media at Reactionpower, told me that she finds diversity in entrepreneurship important. She says, “Businesses with diverse teams perform better financially because they can tap into broader markets and attract a wider customer base.”
Swagata Ashwani, Principal Data Scientist at Boomi, shares this same perspective. She says, “Diversity doesn’t slow us down; it speeds up innovation. It’s like having a toolbox with many different tools, each designed for a specific job. You wouldn’t try to fix every problem with just a hammer, right? In my experience, teams that embrace diverse perspectives create better products and make better decisions…they don’t just follow the rules; they rewrite them.”
Diversity in entrepreneurship is motivational.
Seeing successful business owners and entrepreneurs who look like them and share similar lived experiences is a source of motivation and excitement for other aspiring entrepreneurs and can inspire a new generation of innovation and creativity.
Jacinta Gandy, Brand and Website Designer at The Social Circle, agrees: “Diversity in entrepreneurship is important because it allows other diverse individuals to see themselves in other entrepreneurs. If there is no diversity, the young up-and-coming entrepreneurs will not have the example set of what they could achieve. It is important to provide that example.”
Now that you know why it’s important, let’s examine the current state of diversity to better understand the gaps that can impact the success of different demographic groups of entrepreneurs.
Stats About Diversity In Entrepreneurship
Gender Diversity Stats
- More than half of microbusiness owners in the U.S. are women, up 25% from 2019.
- There are 252 million women-owned businesses globally.
- According to Round Capital, companies with a female founder performed 63% better than companies with all-male founding teams.
- Women in the U.S. are paid 83.7% of what men are paid.
- For every ten male entrepreneurs in the U.S., there are seven female entrepreneurs.
- Young businesses and businesses owned by women and underrepresented racial groups often face greater challenges getting funding.
- 31% of women rate their satisfaction as “high” compared to 42% of men.
- In 2023, less than half of women-owned businesses earned $50,000 or more, compared to 70% of men.
- 62% of women use their personal money to fund their business, are more likely to struggle with work-life balance, and have difficulty building adequate support networks.
- Almost half of women-owned small businesses said having more funding or financial help would have the most significant impact on their business.
- One-third of women under 60 say they lack the financial and nonfinancial resources to start a business, compared to 13% of men in the same group.
- Male founders represent 6.5% of equity founders, yet men own 64% of all equity.
- According to The Secret Life of Entrepreneurs Study commissioned by NPR’s “How I Built This,” 41% of women entrepreneurs report experiencing gender bias, and 33% of women of color entrepreneurs report experiencing racial bias.
- In 2019, female-founded companies received 2.7% of the total capital invested in venture-backed businesses in the U.S.
- During the first quarter of 2020, 4.3% of VC deals went to companies founded by women, compared to 7.1% during the first quarter of 2019.
Entrepreneurship Trends Report
Unlock the future of entrepreneurship with this free report from HubSpot and The Hustle.
- 92% of entrepreneurs have no regrets about starting their business.
- 61% find customers through powerful word-of-mouth referrals.
- 37% of entrepreneurs are targeting higher ARR in the next year.
- And more trends!
Download Free
All fields are required.
Accessibility Stats
- Disability:IN certifies disability-owned business enterprises and its certified businesses generate over $536 million in annual revenue.
- Entrepreneurs with disabilities grew their income by 9% between 2016 and 2021.
- As of 2024, in the U.S., workers with a disability were 8.4% more likely to be self-employed than those without a disability.
- Entrepreneurs with disabilities reported starting their businesses to have a more flexible work schedule and because they’d previously experienced a hostile work environment.
- 61% of survey respondents said they had to demonstrate superior knowledge to be taken seriously as business owners with disabilities.
- Individuals with disabilities are more than 2x likely to work past 65 than their counterparts without disabilities.
Age Diversity Stats
- A majority of Americans who started a business in 2019 and 2020 were between 25 and 44.
- 6% of Americans who started a business between 2019 and 2020 were between 65 and 74.
- A 50-year-old male startup founder is 2.8x more likely to have a successful startup than a 25-year-old male founder.
- Nearly 25% of female founders over 54 report experiencing age bias.
Racial/Ethnic Diversity Stats
- Cities with more diverse populations are more likely to generate innovation.
- The more diversity a region has, the higher the volume of entrepreneurship.
- Minority entrepreneurs contribute nearly $2 trillion annually to the U.S. economy.
- Black owners account for 26% of all new microbusinesses.
- The share of Black women-owned businesses grew 70% since 2020, making them the fastest-growing demographic.
- 11% of classifiable firms in 2021 were majority-owned by Asian Americans.
- 70% of Black small business owners say they’re the first in their immediate or extended family to own a business.
- Small businesses owned by underrepresented groups are twice as likely to say funding is their number one challenge.
- Most underrepresented entrepreneurs would rate the current opportunities available to their primary business venture as “good” (40%), while just 26% would rate opportunities as “excellent.”
- The most significant business and entrepreneurship challenges minority entrepreneurs face are financial, growing and scaling, and marketing and generating brand awareness.
- Latino business owners received less than 1% of the $487 billion invested from venture capital and private equity deals in 2020.
- The average valuation for Latino-owned businesses in 2020 was $572 million, compared to $1.2 billion for other businesses.
- Hispanic women earn 65% as much as white men, and Asian women make 93% as much.
- The National Women’s Law Center says wage discrimination costs Latinas and Native women over $1 million in earnings.
- 39% of Asian and 29% of Hispanic workers say being their race or ethnicity makes it harder to be successful where they work.
- 8 in 10 Black small business owners report experiencing racism from a customer.
- More than 2 in 5 Black small business owners say the fear of having to overcome racial stereotypes almost stopped them from starting their business.
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