Structured Accountability and New Venture Performance: Evidence from a Business Accelerator

Abstract

At an individual level, accountability structures have a negative effect on performance as task uncertainty increases. Less is known about its role on new ventures. We conduct a two-year randomized controlled trial on 361 ventures to test the effects of structured accountability — a policy that encourages founders to periodically express their strategic plans and progress in front of others — on venture performance and conduct in-depth interviews to a randomly selected subsample. We find suggestive evidence that venture performance is affected heterogeneously: structured accountability aids or harms startups as a function of the founders’ level of formal education. Lower-educated founders are benefited (despite their reluctance to it), while higher-educated founders are at least unaffected (despite their desire for more of it).

Keywords: accelerators, entrepreneurship, structured accountability, randomized controlled trial