Do Accelerators Accelerate? A Study of Venture Accelerators as a Path to Success?
A fundamental challenge for new ventures is overcoming liabilities of newness - particularly, lack of business knowledge and lack of social embeddedness. Accelerators, intense, time- compressed entrepreneurial programs, attempt to alleviate these liabilities and accelerate venture development by facilitating learning and network development in new ventures. However, because of time compression diseconomies and the potential for inappropriate standardization, the literature suggests that such attempts at acceleration may be ineffective or even counterproductive. We test these competing ideas by comparing performance effects of accelerator-backed new ventures to a matched set of non–accelerator new ventures. Compared to the non-accelerator new ventures, we find that ventures backed by top accelerators are faster in raising venture capital and gaining customer traction. Intriguingly, our results also indicate that prior founder experience (e.g., prior entrepreneurial experience, formal education) is not a substitute for accelerator participation – suggesting that top accelerators provide a unique form of entrepreneurial learning and networks. Key contributions are uncovering evidence for time compression economies (vs diseconomies) in the new venture gestation process, and unpacking forms of learning and networks that may aid venture development.
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