Understanding the accelerator from resources-based perspective

Chul Hyun Uhm,Joo Yeon Park,Chang Soo Sung

doi:10.1108/apjie-01-2018-0001

Chul Hyun Uhm, Joo Yeon Park + Show 1 more

Open Access

https://doi.org/10.1108/apjie-01-2018-0001

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Abstract

Purpose This study aims to explore Accelerators and their practices in sustaining start-ups within their innovative programs for these companies based on the resource-based perspective. Moreover, with an ever-increasing demand for Accelerators amongst start-up companies, this study also demonstrates the importance of Accelerators, as it pertains to new venture creation. Design/methodology/approach This research uses an exploratory case study approach to examine a comparative view of leading Accelerator companies in the USA and Korea based on resource support. Findings The results of this study show that there are a number of differences between Accelerators of the two countries in terms of the resources they support for early-stage start-ups. The findings also show some similarities. However, in Korea, the Accelerator landscape is limited, where mentorship, resources and investments are not readily accessible, resulting in low success rates for Korean start-up companies. These limitations have had a negative trickle-down effect when providing entrepreneurs with strong access to resources and investors, which highly affects the success rates of early-stage start-ups. Practical implications In terms of the resource-based theory, this study contributes to the growth of early start-ups by emphasizing the role of the accelerator and suggesting the extent and impact that entrepreneurs have access to resources and investors. Originality/value With significant growth in start-ups around the world, the necessity for start-up funding and mentorship has increased drastically. Start-up companies need various types of assets, systems, knowledge and information to achieve their goals. In Accelerators, start-ups receive all the aforementioned resources while also improving their entrepreneurial skills. Start-up companies have many options in seeking investors who support both tangible and intangible resources to boost growth. While there is a wealth of information on traditional funding methods, there are few studies that shed light on the role of Accelerators from the resource-based point of view.

Highlights

UnderstandingThe rise of start-ups and venture capital in recent years has triggered the emergence of a the accelerator new player in start-up ecosystems
The global explosion of interest in entrepreneurship has spurred the growth of Accelerator programs to service the start-up culture, which is no longer limited to just Silicon Valley (California, USA)
We chose three major Accelerators in the USA, namely, Y Combinator, Techstar and 500 Start-ups, in terms of number of investments and exits according to the Crunchbase, a database for IT start-up operated by TechCrunch

Summary

Introduction

UnderstandingThe rise of start-ups and venture capital in recent years has triggered the emergence of a the accelerator new player in start-up ecosystems. Start-up companies have difficulty raising funds because they are based on intellectual assets, and venture capital cannot afford severe uncertainties and limited returns. To improve this market avoidance area, each government supports the initial enterprise support policy (Meyer, 2005). As start-ups begin to proliferate beyond the traditional incubation centers, regional and national leaders are increasingly looking to these companies as a source of economic growth. As they do, officials are confronted with the reality that innovation-driven entrepreneurship differs significantly from traditional venture activity.

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