UNIVERSITY PARK, Pa. — Penn State’s Evidence-to-Impact Collaborative (EIC) contributed legislative and discourse analysis to the third annual Venture Equity Project (VEP) report, published by the Nasdaq Entrepreneurial Center. The researchers who conducted this analysis reviewed state laws and public discussions related to entrepreneurship, identifying top U.S. states fostering inclusive entrepreneurship — which refers to actively supporting people from diverse backgrounds, especially groups who often face barriers such as women, people of color or rural business founders. The goal of the report is to provide insights for policymakers, entrepreneurs, investors and support organizations to strengthen local and national economies.
The Venture Equity Project bring together multiple partner institutions, including EIC, to explore models to expand venture capital access for underrepresented entrepreneurs through cutting-edge research and actionable policy recommendations. Its audience includes entrepreneurs, support organizations such as incubators and accelerators, investors, and government leaders involved in economic development.
“This report is an important resource for understanding how state policies shape opportunities for entrepreneurs across the country,” said Michael Donovan, associate director of the EIC and part of the research team. “Our legislative and discourse analysis contributes a fresh perspective to the national conversation — showing how state decisions can either create conducive conditions for business owners or stand in their way. By contributing this lens, as a component of the larger report and the hard work of our partners, we’re helping policymakers, investors and community leaders get the information they need to support inclusive and sustainable economic growth, so entrepreneurs and the communities they serve can thrive everywhere.”
Researchers at Penn State analyzed over 1.4 million pieces of state legislation introduced or enacted between 2013 and 2023, identifying those focused on themes of entrepreneurship and entrepreneurial equity, or fair access and opportunity for diverse entrepreneurs to succeed and secure funding. They found that only about 1.6% of legislation addressed entrepreneurship.
To conduct the analysis, researchers developed a keyword taxonomy — a structured list of search terms related to entrepreneurship, race, gender and ethnicity — to identify bills that addressed both entrepreneurship and equity. Using this approach, they found that 23 states and Washington, D.C., introduced entrepreneurship-related legislation that included equity considerations during the study period. States with the most activity included Virginia, Ohio, California and Wisconsin. In 2023, Washington, Kentucky and Washington, D.C., introduced the most.
Researchers at Penn State also examined partisan trends. Democrats introduced about 1.2 times as many entrepreneurship-related bills as Republicans over the decade, though this gap narrowed in 2023, suggesting entrepreneurship is increasingly recognized as a bipartisan priority, Donovan said.
The report was developed in partnership with Penn State’s EIC; Heartland Forward, a policy think-and-do tank based in Bentonville, Arkansas, that evaluated business ownership trends through analysis of the U.S. Census and investment data; and the Nasdaq Entrepreneurial Center, which provided qualitative insights into successful entrepreneurial models across the country. JPMorgan Chase also supported this project.
“This collaboration, bringing together academia, nonprofits, finance and think tanks shows how complex teams are needed to tackle complex questions,” Donovan said. “Research findings can drive systemic change and inform the development of inclusive entrepreneurial ecosystems — or organizations or individuals who create supportive environments for entrepreneurs, including mentors, accelerators, policymakers or investors — and engines for economic growth.”
Key findings from the Venture Equity Project
The VEP report highlighted the top-performing states for entrepreneurs of various backgrounds.
The top five states advancing equity for Black entrepreneurs were Oregon, Georgia, Arkansas, Texas and Maryland. The top five states advancing equity for Hispanic entrepreneurs were Florida, Louisiana, Hawaii, South Carolina and Kentucky. The top four states advancing equity for female entrepreneurs were Colorado, Hawaii, Washington and Oregon, along with the federal district of Washington, D.C.
In addition, the report highlighted seven states — Florida, Georgia, Illinois, Maryland, Michigan, North Carolina and Texas — as “Equity Innovation Leaders,” recognized for their systemic approaches to make entrepreneurship more inclusive.
"States that prioritize inclusive entrepreneurial practices are paving the way for sustainable economic growth," Donovan said. "Our findings underscore the importance of state-level policies that integrate economic equity with entrepreneurship."
The report revealed that newer entrepreneurial ecosystems or up and coming startup regions, such as Florida and Georgia, often show higher equity rates, suggesting opportunities for emerging regions to lead. The research also linked business success among groups that have historically faced barriers to funding and growth. According to Donovan, this means that with increased venture capital interest, women, people of color and rural founders create a positive feedback loop for inclusive economic growth. Success for underrepresented entrepreneurs attracts more investment, which in turn creates even more success.
In addition to state-level policy analysis, the report included case studies of organizations showing measurable local impact. For example, Atlanta’s Russell Innovation Center for Entrepreneurs, a community-driven nonprofit, has driven $450 million in economic activity and sustained over 1,300 jobs since 2019, with 46% of participating Black-owned businesses surviving beyond the startup stage, far outpacing national averages. Similar outcomes are seen in North Carolina, where NC IDEA Foundation, an independent private nonprofit, has invested over $23 million in grants to nearly 600 companies, focusing on women and rural founders.
“These examples show how local programs or organizations that help entrepreneurs succeed in specific communities can spark outsized impact in their regions,” Donovan said.
The Venture Equity Project is a multi-year initiative. The most recent report is now available and builds on this state-level analysis to examine metro-level trends in inclusive entrepreneurship, offering more granular insight into how local environments fuel or constrain entrepreneurial success.
The Evidence-to-Impact Collaborative (EIC) is a research center and information hub for the science of using social science – the aim of the EIC is to improve the data, methods, and processes related to research, the dissemination of evidence, and to understand the impacts of the use of research evidence on societal well-being. A center of the Social Science Research Institute supported by the College of Health and Human Development, the EIC leverages expertise in administrative data, program evaluation, and researcher-policymaker relationships for social investment optimization.