New evidence on accelerator performance based on funding and location

• Lydia Canovas-Saiz ^[1] ; Isidre March-Chorda ^[1] ; Rosa Maria Yague-Perales ^[1]
  1. [1] Universitat de València

     Universitat de València

     Valencia, España

     
• Localización: European journal of management and business economics, ISSN-e 2444-8494, ISSN 2444-8451, Vol. 29, Nº. 3 (https://www.emerald.com/insight/publication/issn/2444-8494/vol/29/iss/3), 2020, págs. 217-234
• Idioma: inglés
• Enlaces
  • Texto completo
• Resumen

  • Purpose – Seed accelerators (SAs) appear as a more advanced version of business incubators. These for-profit organizations in exchange of equity, help setting new start-ups by providing mentoring and funding during its first months. Due to their emergent nature, the impact and expectations of SAs remains largely unknown.

    Therefore, the purpose of this study is to throw new light on this field by empirically assessing for the first time the performance and prospects of these organizations through a survey of 116 SAs.

    Design/methodology/approach – A model based on the Business Incubators literature is built with four categories covering size, location, age and profitability variables, leading to two hypotheses to be tested empirically over a survey of 116 SAs.

    Findings – Some remarkable findings arise after implementation of both bivariate and multivariate analysis.

    The results confirm a higher size and performance in the US and in the oldest SAs at statistically significant levels.

    Research limitations/implications – The study is not free from limitations but the findings make a contribution to the still scarce existing literature on SAs, and provide some managerial implications to their stockholders, to investors and to entrepreneurs.

    Practical implications – The findings concerning performance indicators are especially helpful for investors, primarily concerned with the percentage return on investment factor, the period and the investment rounds needed to achieve exit. Another key issue is the SA’s role as an employment seedbed. At first glance, the amount of employment, both overall and per company, might seem small given the young age of these firms. The impact of SAs on the generation of new employment is difficult to measure as it usually takes place in further stages of development of the tenant companies, the so-called scale-up process.

    Nonetheless, at present, the number of new companies being born is remarkable and, in terms of employment, the results are indeed promising. Our findings also offer important implications for entrepreneurs, venture investors and policy-makers. To entrepreneurs, our findings offer insight on the expectations to hold in the accelerator programs.

    Social implications – For policy-makers and would-be accelerator founders, our results support the idea shared in the literature that accelerators can be an effective entrepreneurial intervention, even in small entrepreneurial ecosystems, compared to the strongest entrepreneurial hubs (Hallen et al., 2017).

    Originality/value – SAs are a very recent phenomenon which is blooming all over the world, especially in developed countries. SAs are therefore considered a key agent in the prospects of any entrepreneurial ecosystem. However, no studies have so far analysed the impact and performance of this emerging instrument.

    This is precisely the main purpose of this paper, to offer for the first time an approximate and exploratory assessment on the impact and prospects of SAs, based on a database.