
2025 New Business Formation Report: Women are on Par with Men as Side Hustles & Remote Work Decline
By Gusto Insights Group
Nich TremperSenior Economist June 4, 2025
In 2024, LGBTQ founders made up 10% of all new business owners, a milestone that mirrors broader shifts in identity across the population. This group isn’t just starting businesses; they’re building companies rooted in care, autonomy, and community.
Ten percent of all new entrepreneurs last year identified as LGBTQ, an increase of 50% over the prior year. This rise mirrors broader demographic shifts, with the share of adults identifying as LGBTQ growing from 7.6% of adults in 2023 to 9.3% in 2024.
For the first time, LGBTQ representation among new entrepreneurs matches their share of the general population. This suggests that more LGBTQ people are seeing fewer barriers to entrepreneurship and are choosing it as an accessible and viable path to make a living.
More than one in ten Gen Z and Millennial new entrepreneurs identified as LGBTQ in 2024, representing 70% of all new LGBTQ entrepreneurs. This is compared to 8.1% of new Gen X entrepreneurs identifying as LGBTQ. Younger generations are more likely to identify as LGBTQ than older ones. As more Gen Z adults enter the workforce and start businesses, we’re likely to continue seeing LGBTQ representation among entrepreneurs rise.
Over one-third of LGBTQ-owned businesses started in 2024 were in the professional services industry, and more than half were in community or personal services, including sectors like health care, accommodation, and retail.
These are industries rooted in connection, service, and community, and LGBTQ entrepreneurs are drawn to them. New LGBTQ entrepreneurs were 56% more likely than their non-LGBTQ peers to say they started a business to make a positive impact on their community. That difference (62% compared to 40%, respectively) helps explain why so many LGBTQ-owned businesses are in industries that center on care and community.
More than 60% of LGBTQ entrepreneurs who started their business last year said that they did so to be their own boss, compared to less than half of non-LGTBQ new entrepreneurs. This highlights career autonomy and self-direction as powerful drivers of entrepreneurship among LGBTQ new business owners.
LGBTQ entrepreneurs were 30% more likely than non-LGBTQ entrepreneurs to say they started their business to have a positive impact on their community. For one-third of them, that reason ranked among their top three motivations for starting a business.
LGBTQ entrepreneurs didn’t just want to have a positive impact through their business. They also displayed this value to their employees. New LGBTQ employers were 30% more likely to offer benefits than their non-LGBTQ peers in 2024, with 95% offering benefits compared to 74%.
Among those that offer benefits, new LGBTQ business owners were 79% more likely to offer health insurance and 30% more likely to offer retirement benefits than new non-LGBTQ business owners. These patterns persist even after accounting for industry differences. For example, more than one-third of LGBTQ-owned businesses were in professional services, and more than one-quarter were in community services. In those sectors, only 71% and 55% of new employer businesses offered health insurance. The consistency of benefit offerings suggests that LGBTQ founders place a strong value on employee support and benefits as a part of compensation.
LGBTQ entrepreneurs are starting businesses with a clear sense of purpose. Their decisions around industry, motivation, and employee support reflect commitments to autonomy, equity, and community. Their growing presence in entrepreneurship is a sign that more people see business ownership as a viable and inclusive path.
Nich Tremper is an Senior Economist at Gusto, researching entrepreneurship and the small business life cycle in the modern economy. Nich has worked in research offices in the federal government and financial service industries, studying small business outcomes and their roles in local economies. He holds a Master's degree from the University of Minnesota, where he researched local government business expansion efforts. Nich currently lives in Winston-Salem, NC.Read More
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