Exploring the Treatment Effect of Startup Accelerators on Venture Emergence

Abstract

While startup accelerators are routinely touted in the popular press, research has yet to empirically establish their effect on emerging ventures. In order to confirm whether such a causal treatment effect exists, we adopt a quasi-experimental design to examine whether and how accelerators actually help new ventures emerge. Our sample consists of 4,294 startups that applied to 119 accelerators worldwide from 2013 to 2017. Using propensity score matching with the nearest neighbor matching algorithm, we find that accelerators do facilitate firm emergence. However, by stratifying our sample on the basis of the progress each startup had already made toward emergence prior to entering the accelerator, we also find that this acceleration effect is conditional on a startup’s stage of development. These results not only demonstrate the value accelerators can provide emerging ventures, but more importantly, how accounting for sample heterogeneity by reducing censoring bias can provide a clearer picture of the benefits of acceleration.