Diverse Startups Raise More Cash, Return More to Investors
- Ethnically diverse founders outperform by 30%, study concludes
- Kauffman Fellows examined U.S. startup executives since 2000
Photographer: Thomas Barwick/Digital Vision/Getty Images
This article is for subscribers only.
Startups with ethnically diverse founders are eventually able to raise more operating cash and return more capital to investors than those formed by all-white executives, even as they were less likely to win funding in the first place, a study shows.
Companies with diverse founders ultimately outperform others by 30% when they go public or are acquired, according an analysis of nearly two decades of data by the Kauffman Fellows Research Center. While diverse firms have less access to venture capital in the early going, they tend to raise more money in subsequent rounds, the report concludes.