Immigrants are a major source of entrepreneurship in the United States, driving both firm creation and innovation. Previous research has shown that of all businesses in the United States with paid employees, immigrants started approximately one-quarter of them, and they have been responsible for 23 percent of US patents produced since 1976, despite constituting only 16 percent of the total US-based inventor population. As of 2022, the four most valuable private, venture-backed US companies had immigrant founders, as well as three of the most valuable public companies in the world. Furthermore, research suggests that immigrant-founded firms in the United States and Canada are more innovative than native-founded firms. Moreover, immigrant entrepreneurs often do not form new companies in isolation; they frequently have native cofounders.

Our research evaluates whether start-ups with immigrant and native cofounders outperform start-ups with only native or only immigrant founders. Our dataset includes comprehensive information on start-ups, including their founding date, funding history, investors, acquisition, and initial public offering (IPO) status. We linked this dataset with information from the LinkedIn profiles of more than 850 million people in over 200 countries, including their employment histories, educational backgrounds, occupations, and skill sets. This information allowed us to identify the founders of the start-ups in our data and their country of origin (using the initial country that appeared on their LinkedIn profile).

Our research finds that the immigrant share of US-based entrepreneurs steadily rose from 12 percent in 2000 to 27 percent in 2022. During this period, India was the leading country of origin for immigrant entrepreneurs, followed by the United Kingdom and Canada. Immigrant entrepreneurs were most active in artificial intelligence, blockchain and cryptocurrency, and data and analytics, relative to the total number of start-ups in those industries. Start-ups featuring both US-born and immigrant entrepreneurs were common: Approximately half of British and Canadian entrepreneurs cofounded a company with a US-born entrepreneur, and approximately one-third of Indians did.

Start-ups founded by native-immigrant teams outperformed start-ups founded solely by natives or immigrants. Three years after their inception, start-ups with native-immigrant teams employed 20 percent more people than native-only start-ups. Immigrant-only start-ups also employed more people than native-only start-ups but by a smaller amount: 15 percent. Furthermore, native-immigrant start-ups employed 8 percent more people than immigrant-only start-ups three years after their inception. Native-immigrant start-ups were also significantly more likely to receive funding than native-only start-ups, and they raised substantially more capital than both native-only and immigrant-only start-ups. Start-ups with native-immigrant teams were also more likely to be acquired and more likely to initiate an IPO than either native-only or immigrant-only start-ups.

Our research investigates potential explanations for the increased growth and funding access of start-ups founded by native-immigrant teams. First, these start-ups had access to a more diverse, highly skilled labor pool. Native-immigrant start-ups hired 27.1 percent more immigrants than native-only start-ups and slightly fewer immigrants than immigrant-only start-ups. Additionally, native-immigrant start-ups hired better quality workers than both native-only and immigrant-only firms, as measured by workers’ promotions. Furthermore, native-immigrant start-ups hired immigrant workers of significantly higher quality than native-only start-ups, though they hired native workers of comparable quality. In contrast, immigrant-only start-ups hired native workers of significantly lower quality than both native-immigrant and native-only start-ups, suggesting that native-immigrant teams were particularly effective at sourcing high-quality native and immigrant labor.

A second explanation for the relative success of native-immigrant start-ups is that they had greater access to investor capital than other start-ups. Native-immigrant start-ups were 7.7 percent more likely to be funded by non-US investors than start-ups without an immigrant cofounder. Immigrant-only firms were slightly more likely to access foreign venture capital (VC) funding than native-immigrant start-ups. Additionally, native-immigrant teams disproportionately accessed capital from higher-quality VC funds, as measured by the funds’ number of deals and successful sales of their ownership in start-ups. Moreover, native-immigrant start-ups accessed capital from foreign VC funds of higher quality than native-only start-ups. Native-immigrant start-ups also received capital from domestic VC funds of higher quality than native-only start-ups, while immigrant-only firms were less successful than native-only firms in accessing capital from top domestic VC funds.

A third explanation for the relative success of native-immigrant start-ups is that they had greater access to product markets. We did not have data on the markets where start-ups sold their products or services, so we instead analyzed patents filed within and outside the United States. Native-immigrant firms had 117 percent more patents granted than immigrant-only firms and 28.4 percent more patents granted than native-only firms. Furthermore, immigrant-only firms were less likely to be granted a US patent than native-only firms, but they had similar odds of receiving a foreign patent. In contrast, native-immigrant teams were more likely to receive both US and non-US patents than both immigrant-only and native-only start-ups.

Several findings support these explanations for the increased growth and funding access of native-immigrant start-ups. First, their tendency to outperform was more pronounced in industries and states that make heavy use of both native labor and immigrant labor from the immigrant founder’s country of origin. Similarly, their tendency to outperform was more pronounced in industries and states that heavily source domestic VC as well as VC from the immigrant founders’ country of origin. These findings support the idea that immigrant-native teams had greater access to high-quality labor pools and sources of capital. Furthermore, immigrant-native teams featured greater ethnic diversity and a greater diversity of skills, such as technical skills combined with sales and marketing experience. However, our research suggests that these characteristics did not drive their relative success.

However, the tendency of native-immigrant start-ups to outperform others could be driven by high-productivity entrepreneurs choosing to form native-immigrant teams, rather than the productivity benefits of diversity. Our research addresses this argument by examining the variation in natives’ ability to form start-ups with immigrants. Our findings indicate that a higher proportion of native students to immigrant students in the degree program that a native founder attended reduced the likelihood that the native cofounded a start-up with an immigrant. This fact enabled a different method of analysis that generally confirms our previous findings and suggests even larger effects. Specifically, it suggests that native-immigrant start-ups employed 44 percent more people three years after their inception than native-only start-ups. Additionally, it suggests that native-immigrant start-ups were 35 percentage points more likely to receive funding within three years and raised substantially more funding than native-only start-ups.

Note
This research brief is based on Zhao Jin et al., “Native-Immigrant Entrepreneurial Synergies,” National Bureau of Economic Research Working Paper no. 33804, May 2025.