37% of New Businesses Starts in 2025 Were Started by a First- or Second-Generation Immigrant

First- and second-generation immigrants play an outsized role in starting new businesses, with second generation immigrants – U.S. citizens with one or more immigrant parents – increasingly driving AI-enabled business formations. 

Key findings

• More than one-in-three new business owners in 2025 was a first- or second-generation immigrant, and the second generation immigrant share of new business owners has steadily increased since 2023.

• More than two thirds of entrepreneurs with an immigrant background are persons of color. Hispanics make notable advances in entrepreneurship advancing from the first- to the second-generation

• Half of all second-generation entrepreneurs are female, and immigrants are powering female entrepreneurship. While men are a majority of new business owners, women have achieved gender parity among second-generation immigrants.

• Second-generation immigrants are twice as likely as native born entrepreneurs to say that technology made starting their business possible. Nearly one-in-six (15%) second generation immigrants who started a new business in 2025 said they did so because technology made it possible, more than double the rate among the native born (7%) and well above the rate among first generation immigrants (10%).

• Immigrant entrepreneurs are 11% more likely to use AI in regular business operations than native-born entrepreneurs. Second-generation immigrant entrepreneurs led the way with nearly 70% using AI to start their business.

More Than One-Third of Entrepreneurs Are Immigrants or Children of Immigrants

More than one-in-three new entrepreneurs in 2025 (37%) were first- or second-generation immigrants, underscoring the continued importance of immigrant entrepreneurship to the US economy. First-generation immigrants accounted for 12% of new business owners, while second-generation immigrants accounted for 24%.

Three-quarters of second-generation immigrant entrepreneurs are persons of color 

Entrepreneurs with a first- or second-generation immigrant background are far more diverse than entrepreneurs who do not have any or only more distant immigrant roots: 65% of first-generation immigrant new business owners and 76% of second generation immigrant new business owners in 2025 was a person of color, compared to 15% of entrepreneurs with more distant immigrant roots.

Hispanics make notable advances in entrepreneurship advancing from the first- to the second-generation: 18% of first-generation immigrant entrepreneurs in 2025 were Hispanic, compared to 30% of second-generation immigrant entrepreneurs.

Half of second-generation entrepreneurs were women in 2025

While men are a majority of new business owners, women have achieved gender parity among second-generation immigrants: 50% of second-generation entrepreneurs in 2025 were female, compared to 33% of first-generation immigrant entrepreneurs, and 45% of entrepreneurs with a more distant or no immigrant background. 

In addition to this, women made up 69% and 51% of all Black- and AAPI-founded businesses in 2025, showing that women are driving entrepreneurial diversity.

Second generation immigrants are twice as likely as the native born to start a business because technology made it possible

Nearly one-in-six (15%) second generation immigrants who started a new business in 2025 said they did so because technology made it possible, more than double the rate among the native born (7%) and well above the rate among first generation immigrants (10%). 

Second-generation immigrants were also most likely to say that they started a business out of financial necessity. They were 60% more likely than native born or first-generation immigrants to start a business in order to supplement their income, and nearly three-times more likely than native-born entrepreneurs to start a business because they or a partner lost a job. In a low-fire, low-hire environment finding a job can be challenging, but many entrepreneurs with an immigrant backdown responded by launching their own businesses. 

First generation immigrants are most likely to use AI in regular business operations

Immigrant background entrepreneurs are leading the way in using AI to launch their business. First- and second-generation immigrants are 11% more likely than native-born entrepreneurs to use this technology. Second-generation immigrant entrepreneurs led the way with nearly 70% using AI to start their business. This includes daily operations like marketing, customer support, and product development, among other things.

Conclusion

Immigrants have long been at the forefront of starting new businesses in the United States, and this trend continued in 2025 as second generation immigrants increasingly drove new business formations using AI to unlock new opportunities.