"We've got to make sure that we're taking full advantage … by tapping all the talent America has to offer, no matter who they are or where they set up shop," he said.
The White House version of demo day differed from the Silicon Valley model popularized in "Shark Tank," where would-be entrepreneurs pitch their companies to skeptical financiers.
Entrepreneurs from across the country instead filled several White House rooms for an administration initiative that aims to accelerate high-growth entrepreneurship among women and minorities.
Not unexpectedly, the White House event focused on expanding opportunities, not on raising financial capital.
Obama said less than 3% of companies backed by venture capital firms are headed by women, and less than 1% have an African American founder.
"It's always hard to get in front of the right people, but sometimes it's harder if you're a woman or an underrepresented minority, who all too often have to fight just to get a seat at the table," he said.
Much of Silicon Valley remains a white male bastion, putting pressure on major companies to diversify their recruitment and hiring.
Among the entrepreneurs who attended was Tatyana Kanzaveli, an immigrant from Azerbaijan. She said her company, Open Health Network, allows medical researchers to better manage clinical trials, from recruiting participants to analyzing data.
She launched the company after she was frustrated by a lack of medical research explaining why she, "a healthy, nonsmoker who regularly exercised," had developed cancer.
"Most people who are diagnosed with cancer don't think, 'Let's start a company,'" Kanzaveli said.
Rubi Sanchez, chief executive of Wearless Tech Inc., said she used her UC Berkeley education to create a baby monitor that can track vital signs without touching the infant.
"What was already out there on the market wasn't a good enough solution for parents," she said.
Michael Chasalow, a law professor and director of the small business clinic at USC, said he applauded the White House effort to support a more diverse business community.
"There are so many people who would be good in business and with a little push educationally and financially are able to cross over those obstacles," he said.
Obama chatted with Aaron Horowitz and Hannah Chung, who created an interactive robotic teddy bear to reinforce healthy behavior in young children and help with health challenges like diabetes. About 4% of children newly diagnosed with Type 1 diabetes used the device last year, they said.
"Happy Birthday, Mr. President," the bear exclaimed when Obama, who turned 54 on Tuesday, poked it.