Think back to 1996, when the world was on the edge of a technology revolution. The first social media platform, SixDegrees, and AOL Instant Messenger had yet to exist by about a year. Entrepreneurs were looking for ways to use the internet, and several platforms still in use today, such as Expedia, WebMD and Ancestry.com, first emerged then.
That’s where the research starts.
A majority of US entrepreneurs in ’96 were white men who were born in the US. The Ewing Marion Kauffman Foundation crunched 25 years of data in its new trend report, “Who is the Entrepreneur? New Entrepreneurs in the United States, 1996–2021” showing how things have changed, demographically.
Some of the findings showed a major shift. Some, not so much.
By percentage, there were fewer women entrepreneurs overall in 2021
In 1996, nearly 44% of entrepreneurs identified as women; in 2021, that number was about 40%.
Over the years, the percentage of woman entrepreneurs went up and down between a low of 36.8% (2014) and a high of 46.4% (1998), and has been pretty solidly at 40% since 2015. It’s a small drop from the ’90s, but overall, there hasn’t been much of a change when it comes to gender — except that more people in 2021 might not identify as either man or woman, something the report did not address.
However, it’s worth noting that when you look only at Black women — the fast-growing demographic of entrepreneurs — nearly 17% are in the process of starting a new business, an upward trend.
More entrepreneurs of color have come to the table
In 1996, 77% of new entrepreneurs identified as white. As nearly 5.4 million applications were filed to form new businesses in 2021 — a record — that percentage of new white entrepreneurs has gone down to 54.5%.
The largest share of the increase in new entrepreneurs of color has been entrepreneurs who identify as Latino, who in 2021 represented nearly a quarter (24.2%) of new entrepreneurs, versus 10% in 1996.
Asian entrepreneurs more than doubled over the 25-year period, from 3.4% to 7.3%.
Black entrepreneurs have slowly grown from 8.4% in 1996 to 10.1% in 2021 — but the 2021 number dropped from a high of 13% in 2020.
For more on the increasingly inclusive nature of entrepreneurship, check out Technical.ly CEO Chris Wink’s previous reporting on the topic.
New founders are getting older
The image of the 20- or 30-something new entrepreneur hoping for an early retirement to the islands like Myspace cofounder Tom Anderson is ingrained in our consciousness. But in 2021, just a quarter of new entrepreneurs were aged 20 to 34 — nearly the same amount as new entrepreneurs in the categories of 35 to 44, 45 to 54 and 55 to 64. In 1996, nearly 35% of new entrepreneurs were 20 to 34, and 15% were 55 to 64.
This trend could potentially lead to more stable startups, as research shows that, despite common belief, the likelihood of a company’s success increases with the age of its founders, all the way up to age 60.
Not necessarily born in the USA
Almost 87% of new US entrepreneurs in 1996 were born in the US, with 13% born in another country. By 2021, that number more than doubled, with more than a quarter (28.2%) of new US entrepreneurs born somewhere other than the US.
Knowledge is power!
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