From joiners to founders: Startup employment and underrepresented entrepreneurs

Abstract Research Summary Black women are drastically underrepresented in entrepreneurship, prompting questions about what factors may increase their representation. In this study, we focus on one factor: working as an employee in a startup. While research shows that employment in startups increases the likelihood of founding one's own company, we explore whether this effect differs for Black women. Using abductive methods and a proprietary dataset from Venture For America, we find that the relationship between being a joiner and later becoming a founder is much stronger for Black women compared to other demographic groups. We complement our quantitative analysis with in‐depth qualitative data to better understand what is driving this effect. Overall, our findings contribute novel theoretical and practical insights to entrepreneurship. Managerial Summary Representation among technology founders is very skewed by race and gender. In this study, we suggest one way that may help a very underrepresented group, Black women, create startups at higher rates. By analyzing the careers of 8000+ individuals interested in entrepreneurship, we show that working as a startup employee encourages many to start their own companies. However, this effect is stronger for Black women than for those from other demographic groups. Our rich, in‐depth qualitative data suggest that, compared to other groups, Black women engage in greater levels of self‐reflection and so become more motivated to transition from being a joiner in a startup to a founder of one.