How does the political heterogeneity of startup founders affect startup success? Using data from Crunchbase on startup founder teams and L2 data on the political affiliation of US voters, we identified the political affiliations of the founding members of 2,835 US-based startups. In examining startup team composition, we observed a strong preference for political homophily: teams with similar political views are far more common than those with diverse political views, even after controlling for gender, age, geographic, and industry distribution of founders’ political views. Exploring the impact of political heterogeneity, we found that startups with politically heterogeneous founders have fewer employees and a higher likelihood of shutting down or to get acquired. We found no significant effect on the amount of money raised. We conclude with a discussion of the implications and potential limitations.
