Engine releases ‘Innovation For All’ report
The U.S. startup ecosystem is anchored by the premise that anyone—no matter their race, gender, sexual identity, background, or location—with an idea and the will, can launch a startup and grow a successful company. And while this is technically true, many entrepreneurs and would-be entrepreneurs from specific communities face significantly greater challenges than your average startup founder—typically a 40-something white, heterosexual man,1 who is often a graduate of a top university and resides in an urban environment. But successful startups don’t come from just one type of founder. Women-owned startups are more likely to outperform those launched by their male counterparts, generating higher revenues and a greater average return on investment. And companies with diverse teams generally produce better results—companies with racial and/or gender diversity are more likely to be profitable than less diverse teams, they produce products and services that target a wider market, and they ultimately often lead to better innovation and improved product development because of the breadth of viewpoints represented.
And in turn, diverse participation in the startup ecosystem can improve outcomes for marginalized communities. The success of startups launched by underrepresented founders means the creation of new jobs. Women-founded startups are significant job-generators, and companies that have a woman founder and woman executive hire roughly six times more women employees than those without.4 The ability to serve as a startup investor as a venture professional or an angel investor, opens up opportunities for building generational wealth across all communities. And seeing successful founders from all backgrounds means that more people will view entrepreneurship as a career pathway that is possible for them. But barriers continue to stifle the ability of diverse populations to thrive in the startup ecosystem.
Capital access challenges, student debt, talent availability, immigration difficulties, and more are challenges for many founders, but underrepresented founders are disproportionately impacted. And without policy crafted to address these barriers, equity in the innovation ecosystem is out of reach. Innovation for All—an Engine project supported by the Ewing Marion Kauffman Foundation—delves into the challenges faced by six groups of underrepresented founders—women founders, Black founders, founders of color, LGBTQ+ founders, immigrant founders, and rural founders—identifying hurdles they’ve faced in launching and growing startups and proposing solutions to work towards a more equitable startup ecosystem. As part of this 2-year initiative we heard from 274 underrepresented founders, including 75 women and 82 founders of color, 16 LGBTQ+ founders, 31 rural founders, 37 immigrant founders, and 33 Black founders.
We conducted six roundtables, helped six underrepresented founders to submit statements to the record for congressional hearings, published op-eds and social media campaigns, sent coalition letters to policymakers, submitted comments to agencies, and led a 14-person fly in to Washington, DC, where founders held briefings and relayed their experiences to policymakers firsthand. The findings of this endeavor truly show the depth of innovation, diversity, and the strength of the U.S. startup ecosystem—but they also show that these things exist in spite of policies and practices that hold back underrepresented founders. There is so much policymakers can do to make the startup ecosystem more equitable.
This report will parse out specific areas policymakers can work to improve, but INTRODUCTION government-wide solutions are also needed—including more and better representation throughout government agencies and amongst government decision-makers and more and better data about startups, underrepresented founders, and the government programs that exist to help them. We know myriad resources exist, but many founders—especially underrepresented founders—do not know where they are or how to find them, because there is no singular government office or resource dedicated to startups. Without a full and complete understanding of who is participating in the startup ecosystem and who lacks insufficient access, proposed solutions will fall short. To that end, policymakers should pursue systemic change, including throughout the government.
In order for our startup ecosystem to truly reach its full potential, we must dismantle the barriers that threaten Innovation for All.
Read more here.