Startup team ethnic diversity and investment capital raised

Extant literature suggests that ethnically diverse work teams can generate both positive and negative outcomes, but it is unclear how startup teams are affected. We seek to help clarify the relationship between startup team ethnic diversity and total investment capital. Using statistical analyses on a dataset of startups that participated in Techstars accelerator programs between 2007 and 2018, our results suggest that startup team ethnic diversity is positively associated with the aggregate amount of investment capital raised by startups. Our study results suggest that ‘diversity as advantage’ theories may be more appropriate for theorizing about startup fundraising than ‘diversity as disadvantage’ theories.