Immigrant start-ups may pursue an ethnically homogeneous team as it is easier to identify and attract talents from the same ethnic group. In contrast, they may pursue a heterogeneous team to diversify their social network. This study examines impacts of ethnic diversity in immigrant founding teams on innovation and funding capabilities of high-tech start-ups. Using a manually collected dataset of 132 high-tech ventures in the U.S. between 2009 and 2022, we found that ethnic-heterogeneous immigrant teams outperform ethnic-homogeneous teams in innovation and total funding raised. Our results also show that the positive impact of ethnic-heterogeneous teams on innovation and start-up funding do not increase or decrease as the team size increases. We add evidence to research on immigrant entrepreneurship by showing advantages of ethnic diversity in immigrant entrepreneurship.
