Like Attracts Like? Revisiting Demographic Homophily in Entrepreneurship

New high-tech ventures are an important source of job creation in the United States. However, access to job opportunities in high-tech entrepreneurship varies significantly across demographic groups. A well-established finding suggests that there is a strong tendency towards homogeneity both in the formation of entrepreneurial founding teams as well as the hiring of early employees. Prior work has emphasized the importance of founders’ influence over personnel selection processes in explaining the tendency towards homogeneity in start-ups’ workforces. However, disentangling the influence of personnel selection processes in producing workforce homogeneity from other possible mechanisms presents a significant challenge. Here, we propose that workforce homogeneity in start-ups may also result from workers’ tendency to self-sort into start-ups whose founders resemble them demographically. We use a unique dataset on the recruiting and hiring processes at a sample of high-tech start-ups to attribute between the...