Can accelerators accelerate local high-growth entrepreneurship? Evidence from venture-backed startup activity
We examine the impact of seed accelerator programs—fixed-term, cohort-based educational and mentorship programs for startups—on venture-backed seed and early stage technology entrepreneurship in the regions in which they locate. Accelerators are often opened with an eye towards galvanizing technology entrepreneurship activity in the region through provision of peer effects/role models. We use a difference-in-differences approach that utilizes the staggered introduction of such programs combined with matching methods and synthetic control methodologies to assess the impact of an accelerator’s arrival on the number and a volume of early stage VC deals completed in the region. The arrival of an accelerator is associated with a significant increase in the volume of seed and early stage deals, driven primarily by the emergence of new local VC firms. This increase applies to startups that did not go through an accelerator as well, supporting the notion that an accelerator can lead to peer effects and provision of role models in the ecosystem. The findings suggest that the introduction of such programs can have a general effect on the equilibrium of the regions in which they locate, rather than merely an effect of treatment on the treated, and suggests a role for accelerator programs in galvanizing latent regional interest in entrepreneurial activity.
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