Purpose: This paper investigates the effects of collaborative entrepreneurship and diversity management on entrepreneurial performance.

Research methodology: A cross-section survey of 110 employees from the construction and auto-service SME in Nigeria was adopted, and multiple regression analysis via SPSS version 15 was used to analyze the hypothesized relationships.

Results: The result shows a statistically significant relationship for external collaborative entrepreneurship and diversity management on firm performance.

Limitations: The inability to collect data from all the major cosmopolitan cities in Nigeria where a larger pool of ethnically- diverse workforce resides limits the generalizability of the finding.

Contribution: Entrepreneurs and small and medium scale enterprises in construction and auto works will find this work useful for effective collaboration.

Keywords: Entrepreneurship, Collaboration, Diversity management, Ethnicity, Performance, Nigeria