Untangling the Benefits of Business Accelerators: Experimental Evidence on What Works and for Whom
25 Pages Posted: 29 Oct 2024
Date Written: October 28, 2024
Abstract
Despite the growing popularity of business accelerators, a fundamental ques on remains unanswered: what type of support each type of entrepreneur need the most? While all accelerators provide training, mentorship, and access to networks and investors, they differ in their core focus: some priori ze managerial capital, that is, developing skills for opera onal efficiency, while others emphasize entrepreneurial capital by fostering opportunity recogni on and network expansion. This randomized controlled trial is the first to rigorously evaluate the effec veness of these dis nct approaches for different types of opportunity-led entrepreneurs. The results challenge the one-size-fits-all model: For the average par cipant, managerial capital training proved most effec ve. Training helped them operate their businesses more efficiently, improved business prac ces, and achieved 18% faster growth than those who received entrepreneurial capital training. Conversely, enhancing entrepreneurial capital in high-growth poten al firms unlocked extraordinary performance. These top entrepreneurs grew 43% faster than their peers who did not receive entrepreneurial capital training and generated more fullment employment opportunites. Leveraging regional varia on in program access to compare similar entrepreneurs with and without support, the results highlight the importance of targeting. While it is true that the average parcipant benefited from accessing the program, the result is driven mainly by those average ventures that received managerial capabilites. These findings suggest that accelerators could significantly enhance their impact by offering differenated training based on entrepreneurial potenal.
Keywords: venture performance, business accelerators, randomized controlled trial, entrepreneurial capital
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