A Winning Combination? Exploring the Impact of Demographic Diversity and Human Capital on New Venture Survival

ABSTRACT This study examines the extent to which demographic diversity is related to firm survival in the context of new venture teams (NVTs). Further, the study tests insights from the categorization‐elaboration model to examine whether human capital within the NVT moderates the focal relationship. The study utilizes data on 608 new ventures across 3549 venture‐years from the Kauffman Firm Survey to assess the main effects of demographic diversity and the moderating effects of human capital on new venture survival. Results indicate that gender diversity is positively related to new venture survival, and this relationship is accentuated by general (GHC) but not industry‐specific (ISHC) human capital. Results indicate that racial and age diversity are not directly related to new venture survival; these relationships are conditional on human capital, such that they are positive when GHC and ISHC are higher, and negative when they are lower. These results advance research on the categorization‐elaboration model (CEM) and on new ventures by demonstrating the utility of combining human capital and demographic diversity to form strategic resources beneficial to new venture survival.