Are Accelerators Akin to Breweries or Wineries? A Bayesian Variance Decomposition of Accelerator and Cohort Effects

Avnimelech, G, Dushnitsky, G, Ellaesser, F and Ftiza, M (2024) Are Accelerators Akin to Breweries or Wineries? A Bayesian Variance Decomposition of Accelerator and Cohort Effects. Strategic Management Journal. ISSN 0143-2095 (In Press) OPEN ACCESS

Abstract

Research Summary
The literature on startup accelerators uncovers multiple factors associated with accelerators’ advantages. Yet, we have a limited understanding of the relative magnitude of these factors. We ask: Are accelerators akin to breweries, where quality is mainly a function of the institution of origin (i.e., brewery for beer, accelerator for startups); or are they similar to wineries, where quality varies across cohorts (i.e., for a given winery, some vintages are of higher quality)? We explore this question using data from 1,350 tech-startups graduating from dozens of accelerators in a global technology hub. A Bayesian hierarchical variance decomposition approach is introduced to account for the highly-skewed zero-inflated distribution in startups’ performance. We find that a notable fraction of startup performance is due to vintage; within-accelerator, cross-cohort variation.

Managerial Summary
Startup accelerators (i.e., short-term programs designed to help startups grow) are highly popular, with dozens of accelerators operating around the globe. Our focus is on accelerator programs aimed at catapulting technology ventures towards high growth. We ask: Are accelerators akin to breweries, where quality is mainly a function of the institution of origin (i.e., brewery for beer, accelerator for startups); or are they similar to wineries, where quality also varies across cohorts (i.e., for a given winery, some vintages are of higher quality)? A Bayesian hierarchical variance decomposition approach isused to study data from a global technology hub, detailing the performance of hundreds of startups that graduated across multiple accelerators. We find that a significant portion of startup success is linked to cohort-specific factors within accelerators, highlighting the role of timing and dynamics of each accelerator cohort.

More Details

Item Type: Article
Subject Areas: Strategy and Entrepreneurship
Date Deposited: 08 Oct 2024 07:31
Date of first compliant deposit: 27 Aug 2024
Last Modified: 16 Oct 2024 00:51
URI: https://lbsresearch.london.edu/id/eprint/3828
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