One-in-14 new business owners in 2025 identified as LGBTQ

About 7% of new business owners in 2025 identified as LGBTQ, with above-average representation among younger founders, women, and Hispanics – and twice that share in Community Services. Two things set LGBTQ founders apart: their motivations and their expansion plans. They more often cite community impact as a reason for starting up, and less often cite frustration with a prior job. Nearly half began as solopreneurs, and most expect to stay that way into 2026.

Key findings

• One-in-14 new business owners in 2025 identified as LGBTQ, with slightly higher shares among younger entrepreneurs, among women, and among Hispanics. The LGBTQ share of new business owners has been effectively flat over the past few years.

• LGBTQ founders are much more likely than non-LGBTQ founders to cite the desire to have a positive community impact as a motivation for starting their business, and are less likely to cite dissatisfaction with their prior job.

• Nearly half of LGBTQ new business owners in 2025 were solopreneurs, a higher solopreneurship rate than among non-LGBTQ new owners. Three in 10 work with at least one contractor, but most plan to remain solopreneurs over the next year.

• Over half of LGBTQ entrepreneurs use AI in regular operations, and two-thirds used it to help start their company. Both are higher shares than among non-LGBTQ founders, largely because LGBTQ entrepreneurs tend to work in Professional and Community Services where AI use tends to be more widespread.

In 2025, one-in-14 new business owners identified as LGBTQ

One-in-14 (7%) new business owners in 2025 identified as LGBTQ. The LGBTQ share of new business owners has been effectively flat over the past few years. Compared to other entrepreneurs, LGBTQ founders skew younger and female, and are more likely to work in Community Services.

• LGBTQ entrepreneurs account for 8% of Gen Z and Millennial entrepreneurs compared to 6% of Gen X and Baby Boomer entrepreneurs.

• LGBTQ entrepreneurs are concentrated in Community Services (27%) and in Professional Services (46%). 

• Women are 64% of new LGBTQ business owners, compared to 43% of all new business owners. 

• By race, 8% of Hispanic entrepreneurs identified as LGBTQ, compared to 7% of White entrepreneurs, 6% of Black entrepreneurs, and 4% of Asian American and Pacific Islander (AAPI) entrepreneurs.

Asset building and community impact motivates LGBTQ entrepreneurs 

The desire to build a future asset was the most common motivation cited both by LGBTQ entrepreneurs (53%) and by non-LGBTQ entrepreneurs (49%). However, the two groups differ on the second most common motivation: 39% of LGBTQ entrepreneurs referenced the desire to have a positive community impact, much higher than the 26% of non-LGBTQ entrepreneurs who referenced it. 

By contrast, LGBTQ entrepreneurs were less likely than non-LGBTQ entrepreneurs (31% vs 46%) to cite a “desire to be my own boss” as a motivation for starting their business. LGBTQ entrepreneurs were also much less likely to reference being unsatisfied at their prior job as a motivation (12% vs 20% for non-LGBTQ entrepreneurs).

Each year, new LGBTQ entrepreneurs tell us that they want their business to have a positive impact on their community in addition to supporting their own career. Starting a business for LGBTQ entrepreneurs is often an act of contribution. This trend continued in 2025. LGBTQ entrepreneurs continue to be focused on using their business to strengthen their communities. 

LGBTQ entrepreneurs are more likely to be solopreneurs

Nearly half of LGBTQ new business owners are solopreneurs, a higher solopreneurship rate than among non-LGBTQ new business owners. This holds true across sectors and generations, though it is especially true in Community Services and among younger generations. 

Compared to non-LGBTQ solopreneurs, LGBTQ solopreneurs are more likely to be motivated by the opportunity to increase their income (30% vs 20%), by the desire to seize a business opportunity (26% vs 16%) and by the desire for a positive community impact (25% vs 16%). They are much less likely to be motivated by the desire to be their own boss (34% vs 51%). 

LGBTQ solopreneurs are roughly equally as likely as non-LGBTQ solopreneurs to currently work with a contractor, but they are much less likely to plan to hire their first W-2 employee over the next year and are slightly less likely to plan to hire more contractors over the next year. 

These results suggest that operating without a team is working for most LGBTQ solopreneurs, even if many of them rely on support from contractors. Previous Gusto research suggests that about 4 in 10 solopreneurs pay at least one contractor, and most of those work with multiple contractors. 

Over half of LGBTQ entrepreneurs use AI in regular business operations

Among LGBTQ new business owners in 2025, 52% use AI in regular business operations, 8 percentage points higher than the 44% of non-LGBTQ new business owners who use it. In addition, two-thirds (66%) of LGBTQ new business owners used AI to help start their business, compared to 59% of non-LGBTQ new business owners. 

These differences are largely driven by the sectors where LGTBQ founders tend to focus. Within the Community Services and Professional Services sectors, AI use in regular operations is very similar for LGBTQ and non-LGBTQ entrepreneurs. 

Conclusion

LGBTQ entrepreneurs represent a small but distinctive slice of the 2025 small business founders. While they account for roughly 7% of new business owners overall, their concentration in Community Services, their skew toward younger and female founders, and their above-average representation among Hispanic entrepreneurs point to a group whose entry into entrepreneurship is shaped as much by who they are as by what they sell.