Article

The Effects of Business Accelerators on Venture Performance: Evidence from Start-Up Chile

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Abstract

Do business accelerators affect new venture performance? We investigate this question in the context of Start-Up Chile, an ecosystem accelerator. We focus on two treatment conditions typically found in business accelerators: basic services of funding and coworking space, and additional entrepreneurship schooling. Using a regression discontinuity design, we show that schooling bundled with basic services can significantly increase new venture performance. In contrast, we find no evidence that basic services affect performance on their own. Our results are most relevant for ecosystem accelerators that attract young and early-stage businesses and suggest that entrepreneurial capital matters in new ventures. Received September 1, 2015; editorial decision July 30, 2017 by Editor Francesca Cornelli.

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... Cette récente tendance a pour conséquence d'accroitre l'incertitude quantà la qualité des projets entrepreneuriaux, intensifiant les traditionnels problèmes d'asymétries d'information entre les entrepreneurs et les investisseurs potentiels qui sélectionnent les entreprisesà un stade précoce 26 . Ainsi, de nouveaux intermédiaires ontémergé afin de sélectionner des projets, faciliter l'accès a de nouvelle source d'information, réduire l'incertitude autour de la qualité de succès d'un projet innovant et par conséquent, sur la trajectoire de l'innovation (Cohen and Introduction Générale Hochberg, 2014;Gonzalez-Uribe and Reyes, 2019;Gonzalez-Uribe and Leatherbee, 2018). ...
... D'autres intermédiaires demeurent négligés par la littérature. Il s'agit des incubateurs et des accélérateurs qui fournissent aux entreprises en phase de création des programmes a durée déterminée, un espace d'hébergement, des formationsà l'entrepreneuriat et un financement (Gonzalez-Uribe and Leatherbee, 2018). Les preuves empiriques varient selon le programmeévalué et la stratégie d'identification mise en oeuvre. ...
... Les preuves empiriques varient selon le programmeévalué et la stratégie d'identification mise en oeuvre. Cependant, l'ensemble des analyses mettent en avant que ces programmes semblent significativement influencer la performance des entreprises par le biais du mentorat, des interactions avec des pairs, et leur permet de résoudre les problèmes d'incertitude quant au potentiel d'un projet (Gonzalez-Uribe and Leatherbee, 2018;Yu, 2020;Leatherbee and Katila, 2017). ...
Thesis
This thesis studies different aspects of the factors that directly or indirectly impact innovative activities both at the macroeconomic and microeconomic levels. In a context where policymakers and firms consider innovation as a strategic asset for productivity growth, this thesis aims at contributing to the literature on the determinants of innovation and related market failures relying on primarily empirical contributions. The first chapter considers the impact of competition and trade openness on innovation. Country innovation intensity positively responds to less stringent regulation, but only domestic product-market reform is directly related to innovation. The second chapter evaluates a European program that supports SME’s innovation. R&D grants positively impact patenting, but this effect is stronger for more financially constrained firms by a certification mechanism on the quality of firms. Finally, the third chapter considers the role of information frictions among a crowd-rating framework, on ventures’ subsequent success. This chapter uses a novel sample of French ventures at both the idea and seed stage. Taken together, this thesis explores three different instruments that aim to spur innovation intensity, either in terms of R&D, patents, financing, and venture success outcomes.
... Concerning the objectives/research questions brought, the studies varied a lot. We can highlight some points: the impact of acceleration in the development of new ventures (e.g., Crișan et al., 2021;Gonzalez-Uribe & Leatherbee, 2018) proposals for different accelerator models (e.g., Pauwels et al., 2016;Shankar & Clausen, 2020); and inclusion criteria for startups, entrepreneurs, and companies to be part of the programs (Breznitz and Zhang, 2019). Regarding the theory, few supporting ones have been identified, including open innovation (absorptive capacity), entrepreneurship, and some theories linked to learning (sociomaterial practice theory; practice-based learning; inter-organizational learning). ...
... Time inconsistency (Kim and Wagman, 2014) Open innovation (Kohler, 2016;Prexl et al., 2019;Pustovrh, Rangus and Drnovšek, 2020) Startup selection criteria; selection process (Yin and Luo, 2018) Dynamic socially situated cognition; expert information processing theory (Goswami, Mitchell and Bhagavatula, 2018) Entrepreneurship: Speed in entrepreneurship; time compression diseconomies; and entrepreneurial resource acquisition (Qin, Wright and Gao, 2019) Growth of new ventures, the operation of university accelerators, and the entrepreneurial ecosystem (Breznitz and Zhang, 2019) The knowledge spillover theory of entrepreneurship (KSTE); absorptive capacity. (Cuvero et al., 2019) Community capital framework; entrepreneurial clusters (Bliemel et al., 2019) Bounded rationality (Cohen, Bingham and Hallen, 2019) Interorganizational learning (Hallen, Cohen and Bingham, 2020) Signaling theory; gender role congruity theory (GRCT) (Yang, Kher and Newbert, 2020) High-growth entrepreneurship; business accelerators (González-Uribe and Reyes, 2021) Sociomaterial practice theory and literature on practice-based learning (Katila, Kuismin and Valtonen, 2020) Source: authors. ...
Conference Paper
Practical and theoretical interest in startups grown significantly in recent years, and this phenomenon brings accelerators as a suitable option for the development of these firms. Our study aims to analyze the research field's development on accelerators and present perspectives and opportunities for future research. We use a bibliometric analysis, a systematic literature review, and a content analysis to present the principal studies and references in the area and highlight that entrepreneurship and open innovation are frequently associated with accelerators. Accelerators can be viewed as organizations or as acceleration processes, meaning that acceleration can be used by firm to open innovate and accelerators will need to develop unique characteristics. Finally, we developed four research streams for future studies that have the potential of a better comprehension of the field.
... While accelerators first emerged as private business accelerators aimed at providing heightened returns for private investors, there are now a range of government subsidised or supported accelerators (Bliemel et al, 2019). These often crossover with so called ecosystem accelerators, who instead of trying to generate returns on their investment, attempt to boost entrepreneurial activity in an ecosystem, which means often forgoing their stake and simply providing as much support to entrepreneurs as possible (Clarysse et al, 2015;Gonzalez-Uribe and Leatherbee, 2017). These ecosystem accelerators hint at the role that accelerators can have in EEs more broadly (Bliemel et al, 2019;Gonzalez-Uribe and Leatherbee, 2017), but further attention is required. ...
... These often crossover with so called ecosystem accelerators, who instead of trying to generate returns on their investment, attempt to boost entrepreneurial activity in an ecosystem, which means often forgoing their stake and simply providing as much support to entrepreneurs as possible (Clarysse et al, 2015;Gonzalez-Uribe and Leatherbee, 2017). These ecosystem accelerators hint at the role that accelerators can have in EEs more broadly (Bliemel et al, 2019;Gonzalez-Uribe and Leatherbee, 2017), but further attention is required. ...
Article
Full-text available
As the global startup ecosystem matures its constituent actors are co-evolving in interrelated ways, producing localised entrepreneurial ecosystems around the world. The entrepreneurial ecosystem literature has identified the shared attributes of these systems, but understandings of their inner-workings, interconnectedness, and variance across such systems is lacking. This paper explores the emergence of FinTech entrepreneurial ecosystems in London and Singapore, finding that a single accelerator actor has played a significant role in driving their emergence out of the existing, broader, entrepreneurial ecosystems. It argues that while the entrepreneurial ecosystem literature benefits from a conceptualisation of these ecosystems as complex adaptive systems, there must be a consideration of the potential for transformative agency by actors in the evolutionary dynamics of entrepreneurial ecosystems.
... To answer these questions, we conducted an explorative qualitative study in Santiago, Chile. The Santiago ecosystem is unique, as governmental actors have taken proactive political action to subsidise ecosystem actors and to attract transnational entrepreneurs with incentives to create an EE in their region (Genome 2017;Gonzalez-Uribe and Leatherbee 2018). Based on the empirical evidence, we developed a conceptual model for the early evolution of the ecosystem. ...
... Today, however, Santiago has become one of the leading EEs in Latin America (Genome 2017). Among several public instruments, Start-Up Chile has undoubtedly received the most attention from global entrepreneurial stakeholders outside the country (Carmel and Richman 2013;Gonzalez-Uribe and Leatherbee 2018;Melo 2012). This governmental initiative offers equity-free funding and soft-landings to attract transnational entrepreneurs. ...
... Com o surgimento de diferentes tipos de aceleradoras no mercado, o número de pesquisas sobre o tema tem crescido abruptamente (Carayannis, & Von Zedtwitz, 2005;Goswami et al, 2018). Pesquisas existentes demonstram que etapas de aceleração podem ser fundamentais para a geração de inovação nos empreendimentos que buscam competitividade no mercado (Gonzalez-Uribe & Leatherbee, 2018;Pauwels et al., 2016). Clayton et al. (2018) evidenciam que processos existentes dentro dos ambientes de aceleração podem ampliar a visão dos empreendedores no mercado proporcionando soluções diferenciadas para produtos e serviços. ...
... O fenômeno das aceleradoras de negócios é investigado desde 2003 (Wiggins, & Gibson, 2003;Carayannis et al., 2005;Mtigwe, 2005) e o tema teve um aumento substancial de publicações a partir de 2013. Porém, a definição das aceleradoras como um ambiente de refinamento de negócios em fase inicial (Gonzalez-Uribe, & Leatherbee, 2018;Pauwels et al., 2016;Clayton et al, 2018) ainda carece de um consenso na literatura (Clayton et al, 2018). Carayannis e Von Zedtwitz (2005) analisam as aceleradoras como escritórios de transferência de tecnologia relacionando-as diretamente com a inovação e com programas de empreendedorismo. ...
Article
Purpose: This research aims to develop an overview of the scientific articles on “Business Accelerators”, mapping the academic contributions already made, organizing and systematizing them to show the state of the art of the phenomenon of acceleration of startups. Design/methodology/approach: The methodological approach is qualitative, and the method used is a descriptive systematic literature review. Data were collected on the Scopus and Web of Science databases, between 1990 and 2019. Data collection presented a sample of 403 articles that, after applying exclusion criteria, consolidated into 95 articles. Originality/value: Considering the wide spread of business accelerators in the world, the systematization of the literature made it possible to present the supporting pillars of the accelerators, which allows for an advance in the study of the subject and facilitates the foundation for conducting future research that can also use the suggestions of research carried out. Findings: The results show the acceleration processes, consolidated in a structural acceleration model that is based on four pillars decomposed into eight processes worked by organizations, from the definitions in the literature. Research, Practical & Social implications: The main theoretical contribution is the presentation of the structural acceleration model, followed by the panorama of international publications in the area and identification of new opportunities for future research in the area of entrepreneurship and innovation.
... Second, we explore how business accelerators support startups' growth, answering recent calls (Gonzalez-Uribe & Leatherbee, 2016;Smith & Hannigan, 2015;Wright & Drori, 2018) for in-depth examination of the mechanisms through which accelerators foster the development of startups. Our results show that business accelerators can enhance the development of startup's DC and as a result, startup's performance, revealing a new potential role of business accelerators previously not acknowledged. ...
... Our findings indicate that intensive mentorship facilitates and promotes startups' performance. This result corroborates prior research indicating the key role of mentors in acceleration programs Qian, Mulas & Lerner, 2018) and their positive impact in terms of new knowledge acquisition (Battistella et al., 2017;Gonzalez-Uribe & Leatherbee, 2016;Hallen, Cohen & Bingham, 2016;Polo-García-Ochoa, 2020;Qian et al., 2018;Seet, Jones, Oppelaar & Corral de Zubielqui, 2018;Wise & Valliere, 2014). In line with other studies, our results show how learning from mentors enables dynamic capabilities generation resulting in better performance in terms of probability of getting funded (Ambrosini & Bowman, 2009;Hernández-Linares et al., 2018;Li & Liu, 2014;Tsai, 2001;Qian et al., 2018). ...
Article
Full-text available
Purpose: Accelerators are seen as powerful entities that provide critical support to startups in their development. However, little is known about the acceleration practices by which they help their startups. The present study has as its aim to investigate whether business accelerators do assist their startups in the generation of their dynamic capabilities and in their performance and which processes and organizational routines of accelerators programs become effective drivers.Design/methodology/approach: Drawing from the dynamic capability perspective, this empirical research explores the impact of business acceleration programs in their startups by applying a Canonical discriminant analysis using data from 24 Spanish business accelerators.Findings: This study reveals that certain accelerators practices indeed enhance startups’ dynamic capabilities. Further, absorption, integration, and innovation capabilities had a positive influence on startups’ performance while sense the market capability showed a negative one. These findings enable us to identify which business acceleration practices lead to better startups’ performance improvements.Research limitations/implications: This is a preliminary attempt to help in the untangling of the dynamic capability and the business incubation black box. The cross-sectional design of the study and the fact that the data was gathered from a single country and based on survey results in bias and in a limited generalization of its findings.Practical implications: This research can help decision makers’ in business accelerators to put in practice organizational mechanisms aimed to be more successful in their objectives.Originality/value: This study is pioneer to empirically analysis the relationship between business accelerators’ practices and the generation of dynamic capabilities.
... Since 2000, there has been a steady stream of studies seeking to assess the impact of incubation on startup performance in different contexts (Amezcua, Grimes, Bradley, & Wiklund, 2013;Barbero, Casillas, Ramos, & Guitar, 2012;Barbero, Casillas, Wright, & Ramos, 2014;Dvouletý, Long, Blažková, Luke, & Andera, 2018;Gonzalez-Uribe & Leatherbee, 2017;Hallen, Cohen, & Bingham, 2019;Lasrado, Sivo, Ford, O'Neal & Garibay, 2016;Yu, 2020). ...
Article
Full-text available
Purpose: The role that incubators play in business performance is a topic that has been discussed in the literature. They help to create the necessary conditions for the development of entrepreneurship and business innovation, but studies on their real contribution are lacking, especially in contexts such as the Portuguese one. Business incubators have been strong drivers of entrepreneurship and innovation. The main objective of this study is to assess whether business incubation offers benefits to incubated companies compared to non-incubated ones, particularly in terms of performance. Design/methodology/approach Data were collected from incubated and non-incubated companies in the central region of Portugal. These two groups of companies (incubated and non-incubated) were initially compared using the t-test and the Mann-Whitney test. Then, using linear regression models, the impact of incubation on performance variables was estimated, adjusting for the effect of control variables, when significant. Findings The results suggest that in the first years of life, incubated companies present a higher level of performance than non-incubated ones, an effect that decreases as companies become more mature. Originality/value: The study contributes to deepening the understanding of the role that business incubators play, providing further evidence that in their early life incubated companies outperform non-incubated ones.
... Over the past decade, business accelerators have emerged as a dominant incubation model that provides resources critical for the development of early-stage ventures (e.g., Cohen, 2013;Gonzalez-Uribe and Leatherbee, 2018;Mian, Lamine and Fayolle, 2016;Pauwels, Clarysse, Wright and Van hove, 2016). The goals and purposes of acceleration are typically varied, ranging from business schools for entrepreneurs to alternative funding and business creation vehicles or to instruments of corporate renewal in incumbents (e.g., Cohen, Fehder, Hochberg and Murray, 2019;Hampel, Perkmann and Phillips, 2020;Shankar and Shepherd, 2019). ...
Chapter
Prior research on venture acceleration has in particular examined the impact of accelerators and their design on venture learning. As many accelerators are predominantly catering to digital start-ups, we know little about how typical accelerator mechanisms affect important outcomes like investor readiness and attractiveness in the context of science-based, or deep-tech ventures, i.e. ventures that commercialize technological developments and innovations. We investigate this largely unexplored question by looking at the relationship between accelerator-based experimental learning and outcomes across three indicators of venture performance. While all ventures in our sample received the same accelerator treatment, we identified the emergence of two distinctly different learning paths over time, culminating in different venture outcomes upon exit of the accelerator. We explore linkages between these two learning paths and two venture conditions of technological readiness and prior market knowledge in the team. Our findings contribute to the acceleration literature by revealing a more nuanced view of how learning occurs in an accelerator and how respective strategies may link to venture performance. Our insights are important for accelerator design and practice.
... Given the regions' pathdependent characteristics (Espinoza et al. 2019;Oyarzo et al. 2020), this state has continued over time. To improve the shortcomings of the ecosystem, the Chilean Economic Development Agency (CORFO) came in to fill the gap, delivering seed money, mentoring systems, and R&D funding, with mixed results (Crespi et al. 2020;Gonzalez-Uribe and Leatherbee 2018;Navarro 2018;Romaní, Atienza, and Amorós 2013). With all this expending effort, policymakers expected that all the generated knowledge would transition into new ventures, generating KSTE-related endogenous growth, and thus push the economy forward into a developed, innovation-driven economy -but it has not. ...
Article
Full-text available
This research uses hierarchical linear modelling to test the KSTE in a developing-country context. By trying this theory on a different setting as is usually studied, we attempt to identify boundary conditions, expanding this theory’s understanding. Results show the low effectiveness of this theory in a developing economy, suggesting that additional dimensions are needed to understand it completely. In reviewing the high-tech sector (the only sector in which we found evidence that the KSTE mechanisms apply), our data shows the importance of diversity for technological innovation and thus for firms born out of spillovers. Finally, we find that easiness to start a business interacts with human capital into forming high-tech new firms. Under a more bureaucratic system, high-knowledge human capital will have fewer incentives to switch from employment to self-employment and start a venture. By dealing with the specificities of developing economies when dealing with the KSTE, policymakers can avoid applying police recipes coming from findings related only to developed economies that cannot fit with the characteristics of these countries. In this context, this phenomenon is not particularly relevant for fostering new ventures, joining on the call of avoiding standardized strategies to build efficient entrepreneurial ecosystems.
... Incubators may thus strengthen entrepreneurs' capability to value resources (Bruneel et al., 2012;Eveleens et al., 2017;Patton, 2014;, which fits with the trend of using of incubators as tools for learning and human capital development (Bruneel et al., 2012;Nowak and Grantham, 2000;Sullivan et al., 2020). Recent studies show that these newer incubation models indeed increase venture performance in terms of such as long-term revenue, survival, investments raised, and growth (Amezcua et al., 2013;Gonzalez-Uribe and Leatherbee, 2017;Hallen et al., 2014;Lukeš et al., 2019;Stokan et al., 2015;Van Rijnsoever et al., 2017b). Moreover, the learning processes that take place within the incubator have also received ample attention Fang et al., 2010;Rice, 2002;Scillitoe and Chakrabarti, 2010;. ...
Article
Full-text available
According to the resource-based view, for start-ups to gain a sustainable competitive advantage their resources should be valuable, rare, inimitable, and non-substitutable (VRIN). However, early-stage entrepreneurs often do not have the capability to properly value resources. Incubators are popular tools for supporting early-stage entrepreneurs. Many entrepreneurs initially prefer that incubators provide tangible non-VRIN resources such as funding and office space. While in incubators, entrepreneurs increasingly learn to value intangible resources as VRIN. It is unknown whether this change in resource valuation is caused by the incubator or a learning process common to all entrepreneurs. The aim of this study is to discern whether the change in valuation of resources is a result of the incubation experience or a consequence of a normal learning process. This contributes to a better understanding of the impact of incubation on start-up development. We pose the following research question: What are the effects of incubation experience on start-up entrepreneurs' valuation of different tangible and intangible resources offered by incubators? We develop hypotheses about how incubators change the valuation of specific resources. We test these hypotheses using data from 935 entrepreneurs in North America and Western Europe who completed a survey containing a discrete choice experiment in which entrepreneurs with and without incubation experience were asked to choose between two hypothetical incubators that offer different resources. Our results reveal that incubators indeed contribute to entrepreneurs’ capacity to value resources. First, we find that entrepreneurs of incubated start-ups value non-VRIN resources less than entrepreneurs of non-incubated start-ups. Second, start-up entrepreneurs generally value most VRIN resources more than non-incubated start-up entrepreneurs.
... As the strategic performance of start-ups is heavily impacted by network access, the experience of such networks and endorsement effects, a growing literature uses online performance and traffic measures from company websites, LinkedIn or Facebook (e.g. Gonzalez-Uribe & Leatherbee, 2018;Hallen, Bingham, & Cohen, 2017). Similarly, the work on hand uses the number of referring website domains to the start-up website as a measure for the start-up's market access. ...
Thesis
Corporate Venture Capital (CVC) is an established vehicle for collaboration among a corporation and start-ups. Through equity investments paired with access to resources, capabilities and expert networks, corporations aim at supporting start-up development. Although the efficacy of CVCs is broadly discussed in literature, CVCs are often treated as uniform vehicles. Little is known about the impact of a CVC’s strategic direction and organizational design on the performance of start-ups. Moreover, Corporate Accelerator (CA) is a rather new form of corporate start-up engagement. Due to its newness limited research is available and literature urges – among others – to compare CA with more established form of corporate start-up support, especially CVC. Following these identified research gaps the dissertation consists of two empirical sections. In the first section, the effect of a CVCs organization and strategic direction on start-up performance is evaluated. Using a hand-collected unique data-set of 210 start-ups under the management of 21 German CVCs, the study finds that organization of a CVC impacts the financial and strategic performance in multiple ways. Distinct hypotheses on portfolio size, concentration and fit, previous experience and CVC leadership are developed and tested empirically. The results show that CVC strategy and organization matter for start-up performance, however, disparate effects are observable for financial and strategic performance. Large portfolios enhance the performance of start-ups under CVC management, whereas both portfolio concentration and industry fit have a negative relationship with start-up performance. Moreover, more established CVCs support financial, yet impede strategic start-up performance. Lastly, it is detected that Previous industry experience of CVC personnel leads to financial start-up performance, whereas previous founder experience of CVC personnel strengthens strategic start-up performance. The second section aims at empirically reflecting the differences between CVC and CA, the start-ups under management and performance implications. The work is based on a novel multi-level and hand-collected dataset on financial and strategic performance covering 21 German CVCs with 210 start-ups and 15 German CAs with 132 start-ups. The results show that CVC and CA differ. CVCs tend to support older and further developed start-ups that operate more frequently in strategic proximity to the corporate parent, whereas CAs collaborate with younger and less mature start-ups across varying industries. In addition, CVCs stimulate start-up performance more than CAs do, even when matching CVC- and CA-managed start-ups based on their size and stage of development All in all, the work adds to literature in multiple ways as understanding of CVCs is deepened through a grounding in economic theories, uncovering of white spots determination of performance implications of a CVC’s strategic direction and organizational design and differentiation from a similar corporate venturing form, Corporate Accelerator. The work empirically supports that a differentiation of financial and strategic performance is required in corporate venturing research and sheds light on how CVCs should be organized to foster start-up performance. Moreover, it offers an enhanced understanding of CVC through an empirical comparison with the new phenomenon of CAs. Lastly, empirical evidence on CVC and CA is given based on a German dataset, in contrast to the majority of studies, being based on US data.
... mentors and advisors offer counsel on internal, managerial decisions such as human resources, marketing, or engineering. Although some entrepreneurs may join an incubator or accelerator with educational or work experience relevant to their nascent firm, venture development programs can augment this with entrepreneurship-specific knowledge, information, and support (Cohen, Fehder, et al., 2019;Gonzalez-Uribe & Leatherbee, 2018). For example, Hallen et al. (2020) found that accelerators complement a founding team's human capital and augment a team's prior experiences. ...
Article
This study investigates how venture development programs such as private incubators, university incubators, and accelerators influence the success of participating nanotechnology startups. With the recent growth in such programs, empirical work is needed to compare their impact on participants across programs and with nonparticipants. Using data on firm bankruptcies, liquidation, government grants, and venture capital, we find benefits, but the influence of each venture development program varies greatly. We further investigate the influence of program services and resources to clarify program heterogeneity beyond existing typologies. The results clarify the role of these programs and ecosystem intermediaries.
... As a result, accelerators can effectively increase the number of investments made into early-stage firms (Hochberg, 2016) as well as the number of active investors (Fehder and Hochberg, (2014), and help ventures grow their revenue at an increasing rate (Lasrado, Sivo, Ford, O'Neal, & Garibay, 2016). Altogether, the roles of accelerators in startup ecosystems serve as a driving force of job creation (Glaeser, Kerr, & Kerr, 2015) and economic growth (Gonzalez-Uribe & Leatherbee, 2017;Vergara, Bonilla, & Sepulveda, 2016). Nevertheless, the performance and reputation of different accelerators can vary quite dramatically. ...
Article
Full-text available
This study examines the implications of reputational concerns on a startup accelerator’s decisions towards effort exertion in the venture assessment process and strategic adoption of information revelation policies. In our model, the startup accelerator charges an equity share of the venture admitted into her acceleration program in exchange for the resources provided to help nurture and prepare the venture for fundraising from the investor. The accelerator can choose how much effort to exert in the accelerating process, which in turn determines how accurately the accelerator can learn about the quality of the venture. At the end of the acceleration program, the accelerator can then decide whether to reveal this quality information to the investor consistently with (full disclosure regime) or contrastingly to (biased disclosure regime) what has actually been observed. The accelerator’s reputation will be negatively affected if the venture’s performance does not match with what the accelerator previously announced to the investor. Our findings show that the accelerator is motivated to exert a high level of effort in learning about the venture’s quality and fully disclose the credible quality information to the investor when the severity of the reputational loss is sufficiently high. Otherwise, if the impact of the reputational loss is too small, the accelerator would exert no effort in assessing the venture’s quality and announce information about the venture based primarily on the market information, which may or may not match with what she has actually observed during the acceleration program. Furthermore, we show that a larger equity share makes the accelerator more sensitive to the reputational loss, and hence, the accelerator is better incentivized to exert significant effort to improve the accuracy of the venture’s quality information and adopt the full disclosure regime.
... To date, empirical research is mixed regarding the effects of ESOs on venture financial performance, job creation, and survival. Concerning financial performance, studies find: no effect from incubator participation (Peña, 2004); a negative effect from incubator participation, versus non-participation (Dvoulety et al., 2018); a negative effect from public incubator participation, versus external financial support (Lerner & Haber, 2001); negative short-term sales implications that become positive over time, versus non-participation (Lukeš et al., 2019); a greater ability to raise funds, hit milestones faster, and via formal investors from incubation and acceleration, versus non-participation Gonzalez-Uribe & Leatherbee, 2018;Hallen et al., 2020); and, an ability to raise funds, based on certain accelerator design configurations (Cohen et al., 2019a). The fewer studies that examine employment growth find: no effect from incubator participation (Lukeš et al., 2019;Peña, 2004;Schwartz, 2011); mixed results from accelerator participation (Breznitz & Zhang, 2019;Hallen et al., 2020); requiring a combination of "support infrastructure elements"beyond ESO useto have any effect (Del Sarto et al., 2020;Roig-Tierno et al., 2015). ...
Article
Full-text available
Entrepreneurial support organizations (ESOs), such as incubators and accelerators, are now ubiquitous. Despite this proliferation, their impact on entrepreneurs, ventures, and communities remains unclear, while academic research remains disjointed and largely descriptive, limiting understanding of the entrepreneurial support process and the influence of ESOs on it. Conducting a systematic review of 337 peer-reviewed articles involving five ESO forms—incubators, science parks, accelerators, maker spaces, and co-working spaces—we find that the literature’s conception of support is under-socialized such that there is a need for longitudinal, processual, and experimental examination of changes in the rich relationships between entrepreneurs and their ventures, entrepreneurs and other entrepreneurs, entrepreneurs and ESOs, and ESOs and external stakeholders. Conceiving of support as help to become self-sufficient, we offer an alternative, relational approach to research on entrepreneurial support and those organizations seeking to provide it.
... While some studies have reported lower chances of start-up survival (Schwartz, 2013) and achieving key milestones (Yu, 2020), others have found positive effects on exit financing (S. Smith et al., 2015), venture performance (C. S. R. Chan et al., 2020;Gonzalez-Uribe & Leatherbee, 2017), and funding and employee growth (Hallen et al., 2020). That said, studies claiming positive effects have faced selection problems and issues of limited generalizability (Stokan, Thompson, & Mahu, 2015). ...
Thesis
Full-text available
A significant number of incubators and accelerators have emerged to support start-ups aiming to solve societal or environmental problems. However, there is still limited understanding of how these ventures perceive the value proposition of incubators and accelerators – and whether their support needs differ from those of conventional start-ups. This study utilizes the framework of organizational sponsorship to explore the acceleration of social start-ups. It is based on in-depth interviews with the founders of 10 start-ups from an impact-oriented incubator in Duisburg, Germany. Through an inductive study of multiple cases, this research generates three main insights. First, the social-mission focus of these ventures leads to significant differences as compared to commercial ventures in how they perceive incubator benefits. Second, social start-ups profit more from intangible resources such as social capital and knowledge than from tangible resources such as seed funding. Third, incubators and accelerators need to adapt their service offerings to address the needs of social start-ups. This study contributes to the understanding of entrepreneurial support by presenting a systematic assessment of incubator and accelerator services from the perspective of social start-ups. Its main theoretical contribution is to extend the organizational sponsorship framework by proposing a novel support mechanism: impact acceleration. It provides practical recommendations for not only funders and managers of incubators and accelerators but also social start-ups seeking entrepreneurial support.
... More recently, studies have employed family background and parental characteristics as IVs to estimate the effects of formal education on entrepreneurial choice or returns to education for entrepreneurs (Block et al., , 2013Fossen & Büttner, 2013;Habibov et al., 2017;Hogendoorn et al., 2019;Iversen et al., 2016;Masakure, 2015;Parker & Van Praag, 2006;Van Praag et al., 2013). Other studies either use a fuzzy regression discontinuity design or a combination of IV and difference-indifference approaches to examine the effects of entrepreneurship education or business training programs on entrepreneurial skills, motivation or performance (Gonzalez-Uribe & Leatherbee, 2018;Oosterbeek et al., 2010), but these studies do not focus on formal school education. ...
Article
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We utilise the implementation of the 1986 Compulsory Education Law in China as a natural experiment to examine the relationship between educational attainment and migrant entrepreneurship. Using data from the 2017 China Migrants Dynamics Survey, results from our preferred two-stage least square model, which uses instrumental variable and difference-in-differences estimators to correct for endogeneity, suggest that having one additional year of education generates a 3.5 percentage points increase in the probability of being an employer entrepreneur vis-à-vis an employee, and a 4.7 percentage points increase in the probability of being an employer entrepreneur vis-à-vis a solo entrepreneur. Having better education, however, does not affect the propensity to become an entrepreneur in general vis-à-vis an employee or a solo entrepreneur vis-à-vis an employee. These results are robust to various checks including alternative estimation methods and ways of defining entrepreneurship. We also explore the channels through which educational attainment influences whether one chooses to become an employer entrepreneur. Our findings suggest that assortative mating, difficulties experienced in the host location, permanent settlement intention and social capital mediate the relationship between better education and the choice of both becoming an employer entrepreneur vis-à-vis a solo entrepreneur and an employer entrepreneur vis-à-vis an employee, while risk preferences are a mechanism through which education affects the probability of becoming an employer entrepreneur as opposed to a solo entrepreneur.
... Untuk itu, perusahaan perlu memfokuskan perhatiannya pada upaya pengembangan keterampialn karyawan agar dapat menunjang peningkatan produktivitas usaha mikro. Upaya pengembangan keterampilan karyawan diyakini dapat meningkatkan kinerja usaha dalam jangka panjang (Gonzalez-Uribe and Leatherbee, 2018;Samosir et al., 2016). Ibarat memberikan hadiah kepada seseorang, jika hadiah tersebut adalah barang (fisik) maka seiring berjalannya waktu, nilai barang tersebut akan mengalami penyusutan manfaat. ...
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Nowadays, regarding increasing number of micro-business in urban areas, achieving competitive advantage is considered as one of the business concerns. Obtaining competitive advantage entails specific requirements that social capital, physical capital, and human capital - is regarded as one of the most important factors. This study aims to examine the effect of capital to the performance of microbusinesses. The sample of this study was 31 micro-businesses in Wenang subdistrict, Manado, who were selected by simple random sampling. After distributing the questionnaires, the data analysis was done by SmartPLS 3.0 M3. The result show that social capital and physical capital had no significant effect on the performance of micro-business, while human capital had a positive, and significant effect on the business performance. The implication is the Manado City government has to make the labor of micro-business as the target of empowerment activities that are organized by the government, private sector, bank, NGOs, domestic or foreign. In the long term, it can drive the micro-industry to the small and medium industries.
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Research summary Designing effective entrepreneurship training programs is still a challenge despite the investments in training made by governments and private institutions, and its importance for economic growth. We report a case of impact measurement of a social entrepreneurship program based on repeated randomized controlled trials (RCTs), discuss challenges of conducting repeated RCTs, and implications for policy evaluation. Impact measures from the first edition of the program showed no detectable treatment effects. The second edition was adjusted by reducing leadership training and increasing traditional entrepreneurial skills training, and had strong treatment effects on entrepreneurial activities, the creation of a new venture during the program, and subsequent start‐up activity. Employing sequential field experiments can improve entrepreneurship training programs despite the challenges of executing RCTs in the field. Managerial summary Governments, institutions and businesses increasingly invest in innovative entrepreneurship training programs that tackle societal problems. However, we know very little about the effectiveness of such trainings. To measure the causal impact of a social entrepreneurship training program we use an experiment where we assign one group of applicants randomly to training. A comparable group is selected randomly to not obtain the training. There were no detectable differences between the two groups the first time the program was run. After substantial changes were made, where analytical skills training was boosted at the expense of a reduction in social leadership skills training and social entrepreneurial identity development, and individualized coaching intensified, we find a large impact on entrepreneurial activities, both during the program and three years later.
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Las políticas de apoyo al emprendimiento están ganado espacio en las agendas de la mayoría de los países del mundo. En este marco, es cada vez más necesario disponer de evidencias que permitan valorar la contribución efectiva de estas políticas y conocer cuáles funcionan y cuáles no. Esta necesidad llevó a una creciente difusión de las evaluaciones de impacto, principalmente a partir de la utilización de herramientas econométricas. Sin embargo, las características propias del fenómeno del emprendimiento desafían y ponen en tensión varios de los supuestos subyacentes a este tipo de evaluaciones. En este trabajo se propone identificar y discutir cuáles son estos desafíos y tensiones, y a partir de estas reflexiones propone un marco integrador de un sistema de evaluación y aprendizaje que combine diferentes metodologías y miradas sobre la política y su implementación. y que permita abrir "la caja negra" del emprendimiento y de las intervenciones.
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Research summary We examine how university entrepreneurship programs affect entrepreneurial activity using a unique entrepreneurship‐focused survey of Stanford alumni. OLS regressions find a positive relationship between program participation and entrepreneurship activities. However, endogeneity hinders causal interpretation. We utilize the fact that the entrepreneurship programs were implemented at the school level. Using the introduction of each school's program as an instrument for program participation, we find that the Business School program has a negative to zero impact on entrepreneurship rates. Participation in the Engineering School program has no impact on entrepreneurship rates. However, the Business School initiative decreases startup failure and increases firm revenue. University entrepreneurship programs may not increase entrepreneurship rates, but help students better identify their potential as entrepreneurs and improve the quality of entrepreneurship. Managerial summary Recently, many universities have developed programs to promote entrepreneurship. However, relatively little is known about the impacts of such university initiatives. In this article, we examine the two major initiatives that were established in the mid‐1990s—the Stanford Center for Entrepreneurial Studies at the Business School and the Stanford Technology Ventures Program at the Engineering School. We find that the Business School program had a negative to zero impact on entrepreneurship rates and participation in the Engineering School program had no impact on entrepreneurship rates. However, the Business School initiative decreased startup failure and increased firm revenue. University entrepreneurship programs may not increase entrepreneurship rates, but help students better identify their potential as entrepreneurs and improve the startup performance.
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Intermediaries such as accelerators support entrepreneurial activity in developing countries by connecting entrepreneurs to critical resources and by reshaping the entrepreneurial ventures so they can better participate in larger markets. Existing research has examined the activities intermediaries undertake and how these activities influence intermediary effectiveness. However, we know much less about which entrepreneurial ventures benefit from intermediation. Using 24 months of pre- and post-intervention sales data for 139 ventures working with a business accelerator in Central America, we find that facilitating resource acquisition is less important than the constraints to change within the entrepreneurial ventures themselves. Thus, our study suggests that although facilitating resource acquisition through venture acceleration is important, it may be insufficient for increasing venture growth. Rather, the malleability of the venture may play a more important role in intermediation effectiveness.
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This paper studies how early stage entrepreneurs respond to negative feedback about the quality of their ventures. We use data from new venture competitions, some of which privately inform founders of their relative rank. The empirical strategy compares lower and higher ranked losers across competitions in which they did and did not observe their standing. Receiving negative feedback increases average venture abandonment by 13 percent. Differences in responsiveness – for example, in venture risk, venture maturity, and signal precision – are consistent with particular theories about entrepreneurship, including the importance of experimentation.
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Human resources are the key elements to improve organizational performance. Among other aspects, in particular, this factor plays an important role in accelerating business agility in organizations. This study is aimed to investigate effective individual factors on the performance of accelerators. Due to research that, a Systematic Review has been implied as to the method, and pertaining this technique, coordinate and deep surfing has been done on the literature; so that, relevant qualitative and quantitative research works have been integrated together. The final examined results of this study are based on the finding of 35 papers. 39 open codes as the sum of the components of individual capabilities are extracted and from this, five main core codes are detected as demographic characteristics, psychological characteristics, job recruitment merits, personality dimensions, and Individual dynamics factors. Literature surfing has been done with more accentuation about psychological characteristics more than the other ones. As a result, it has been suggested that in order to improve the performance of accelerators, a keen eye must be kept on these three individual variables.
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Purpose The purpose of this paper is to use a combination of resource-based theory and dynamic capabilities theory to explore the phenomenon of startup survival in an emerging entrepreneurial ecosystem. Design/methodology/approach The study has a phenomenological research design, with an exploratory scope and qualitative approach. It uses in-depth interviews to identify the perceptions of ecosystem agents about the phenomenon of survival. Findings This paper argues that startup survival should be studied as a construct that is reflected by four conditions: break-even point, accelerated growth, cash stock and continuous operation. Furthermore, it is formed by the interaction of five mainly interacting resources: human capital, social capital, entrepreneurial capital, organizational capital and the incubation process. Originality/value The study offers a holistic model of survival that could be applicable to incipient entrepreneurial ecosystems such as the Peruvian one. This model presents survival as a reflexive-formative construct and not as a dichotomic variable (enterprise operating/enterprise closed) as has been commonly considered in the literature.
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Research Summary We examine a learning‐by‐doing methodology for iteration of early‐stage business ideas known as the “lean startup.” The purpose of this article is to lay out and test the key assumptions of the method, examining one particularly relevant boundary condition: the composition of the startup team. Using unique and detailed longitudinal data on 152 NSF‐supported lean‐startup (I‐Corps) teams, we find that the key components of the method—hypothesis formulation, probing, and business idea convergence—link up as expected. We also find that team composition is an important boundary condition: business‐educated (MBA) members resist the use of the method, but appreciate its value ex post. Formal training in learning‐by‐thinking methods thus appears to limit the spread of learning‐by‐doing methods. In this way, business theory constrains business practice. Managerial Summary Lean startup methodology has rapidly become one of the most common and trusted innovation and entrepreneurship methods by corporations, startup accelerators, and policymakers. Unfortunately, it has largely been portrayed as a one‐size‐fits‐all solution—its key assumptions subject to little rigorous empirical testing, and the possibility of critical boundary conditions ignored. Our empirical testing supports the key assumptions of the method, but points to business education of team members as a critical boundary condition. Specifically, MBAs resist the use of the method despite being in a strong position to leverage it. Results from a post hoc analysis we conducted also suggest that more engagement with the method relates to higher performance of the firm in the 18‐month period following the lean startup intervention.
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Research on entrepreneurial ecosystems (EEs) is still advancing as a concept that both practitioners and scholars claim has advanced beyond other approaches to fostering or explaining regional entrepreneurship. However, criticism of the concept centers on a lack of understanding of causes and effects and the importance of single instruments for its functionality. While practitioners and policy makers are jumping on the bandwagon and trying to aim policies directly at entrepreneurial ecosystems, investigation of the role of single instruments and their impact on entrepreneurial ecosystems remains insufficient. Fostering entrepreneurship through startup competitions (SUCs) is a decades-old policy instrument. Today, both scholars and practitioners mention SUCs as an element of entrepreneurial ecosystems, but analyzing them from that perspective remains undone. Building on a regional understanding of entrepreneurship and entrepreneurial ecosystems, this paper provides a novel framework for the role of startup competitions in entrepreneurial ecosystems. Following on previous studies of SUCs, this study identifies core mechanisms and benefits of the competitions and presents a general framework for SUCs. Then, the study results are synthesized with mechanisms central to entrepreneurial ecosystems, e.g., entrepreneurial learning, networks of entrepreneurial-related actors in the region, and financing entrepreneurship. It is argued that startup competitions work as network hubs in entrepreneurial ecosystems because they connect: a) entrepreneurs with each other, b) entrepreneurs with relevant actors (e.g., financiers, experts, entrepreneurship support organizations), c) those actors among themselves. Therefore, the competitions are “anchor events” and strengthen the overall quality of the EE in which they occur. The study also argues that SUCs benefit from a functioning EE’s positive climate for entrepreneurship and the availability of resources. The study is theoretical, and its findings lead to an agenda for further research.
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Although the literature on accelerators, an important and newer model of entrepreneurial support, considers their performance and the definition of the form, little is known about how accelerators populate in a single ecosystem over time. We find accelerators are established by different types of entities such as non-profit organizations, local governments, universities, and even foreign government agencies with different goals. Based on a novel dataset of all 107 accelerator programs that ever operated in New York City, we propose a new way of categorizing accelerators by their founding attributes. We confirm that the emergence of accelerators in New York City started with the entry of non-profit accelerators for the purpose of local economic development. For-profit actors followed. Accelerators began from the periphery of the city’s geographic boundaries, but over time became concentrated in Manhattan. We also observe a shift toward sector specialization. Our contributions are to examine the development of one entrepreneurial support organization over time in one ecosystem, present a method to categorize accelerators based on their sub-niches, and to provide evidence of a catalyzing role of local government in fostering ecosystem emergence.
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Seed accelerators are a new generation of business incubators. While the number of seed accelerators worldwide has grown exponentially, there is as yet no consensus on how to measure and analyse their performance. Therefore, the present study, using two pioneering surveys, aims to cast new light on this field by empirically assessing the performance of accelerators and the prospects of their accelerated firms. A model is built on two perspectives that are used to assess the prospects of the accelerated firms: (1) the accelerator´s perspective, and (2) the accelerated start-ups’ perspective. The results confirmed, at statistically significant levels, that the portfolio size of accelerators, their start-ups´ survival rates, and the number of employees in the accelerated firms, have a positive effect on the median value of the funding received by the accelerated start-ups from the accelerators’ funds. Furthermore, accelerators located in the U.S., and those with the greatest longevity, are shown to have a higher impact on start-ups´ survival rates. The study is not free of limitations, but its findings contribute to the still scarce quantitative literature on the performance of accelerators, and provide important managerial implications for their managers, investors, and entrepreneurs.
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Se puede definir al emprendimiento, como la forma en la que las personas invierten dinero para desarrollar alguna idea que se derivan en el desarrollo de proyectos innovadores comúnmente con alto valor estratégico, para Bedoya Mauricio (2017), el emprendimiento es la manera en la que empresas de creación reciente intentan sumarse a la competencia agresiva de solventar alguna necesidad, producto o servicio, donde se desarrollan ideas innovadoras para generar capital y poder ingresar al mercado especifico del producto que se oferta, con creciente expansión de competitividad, en los mercados actuales se está comenzando a crear nuevos mercados sin explotar para emprender de una manera más segura, ante lo anterior afirma Eshter Michelle y García Michelle (2020), quienes definen a la cultura emprendedora como la capacidad de proyectar ideas innovadoras que mediante acciones desarrollarlas de manera conveniente, también mencionan que están estrechamente ligadas con la innovación porque en la actualidad cada vez los emprendedores deben esforzarse más en que sus ideas se relacionen con la tecnología para transformar o crear productos con mayor atractivo para que de ese modo sea más fácil competir con el resto del mercado que siempre está en constante expansión, pero no todo es crear nuevos productos sino también es necesario planificar y gestionar los proyectos que ya están establecidos para que sigan siendo rentables; para realizar esto se realizan objetivos que los proyectos deben cumplir, denominándose así como emprendimiento a todo aquel negocio que intenta sumarse a un mercado preestablecido o totalmente nuevo, haciéndolo de maneras distintas que varí????an tanto por la creatividad de los emprendedores como de las herramientas a disposición.
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Given the legitimacy challenges faced by entrepreneurs, gaining access to the resources necessary to create viable new ventures is often difficult. Accordingly, scholars advocate that entrepreneurs align with high-status partners to convey that they are an accepted part of the sociocultural and organizational landscape. Although startup accelerators have been argued to play this supportive role for high-tech, high-growth ventures, it remains unclear whether they are effective at serving the needs of ventures pursuing social missions alongside business structures, or for-profit social ventures (FPSVs). To explore this issue, we examine whether social impact accelerators (SIAs), accelerators specifically designed to support FPSVs, help such ventures make the transition from mere ideas to viable organizations, a process known as emergence. To determine a causal relationship, we employ a quasi-experimental design and adopt propensity score matching with the nearest neighbor matching algorithm to study 7185 startups that applied to 383 accelerators worldwide from 2013 to 2019. By matching accepted startups to a control group of rejected startups, we find that SIAs, on average, facilitate new venture emergence, with accelerated FPSVs raising more external financing, earning more revenues, and hiring more full-time employees than their unaccelerated counterparts. These results hold when controlling for selection bias, thereby providing robust evidence for a causal relationship between acceleration and startup emergence. However, a subsequent subgroup analysis reveals that this causal effect is contingent across a breadth of “who,” “when,” and “where” contexts, highlighting the idiosyncratic differences that different startups face in the acceleration process.
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The effect of corporate venture capital (CVC) investments is far from being conclusively discussed in literature. Although the expected benefits of CVCs for corporations and start-ups are undisputed, empirical evidence is mixed. We combine and analyze the results of 32 CVC studies, including 105,950 observations: Our results suggest that while CVC investments are positively linked to start-ups’ and investors’ as well as strategic performance, we find no significant relationship between CVC investments and financial outcomes. The effects are moderated by the timing of the investment, the country and industry-effects. For instance, CVC investments in North America and the ICT sector report significant positive effects, while we find no statistical evidence for the health care sector.
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Purpose As the main factor for sustainable development of countries, entrepreneurship is a difficult path only chosen by those who have a high level of risk-taking. On this path, entrepreneurship requires an ecosystem that welcomes this type of thinking and eliminates the barriers on the path as much as possible. This ecosystem comprises various components that attempt to pave the way in a private and public manner. The entrepreneurial ecosystem still has many latent aspects after several years. This study aims to provide a big picture of all studies published in the Web of Science database to help future researchers. Design/methodology/approach In this research, 765 scientific papers published in the database were analyzed using 3 main approaches of network analysis, co-occurrence analysis of keywords and co-citation clustering. Findings In the end, four major clusters were identified for articles in this field in the clustering section, including the entrepreneurial ecosystem, academic entrepreneurship, innovation ecosystem and institutional entrepreneurship. Originality/value This paper used a new approach for reviewing the entrepreneurial ecosystem and made a big picture of all previous research studies. In the end, an unsupervised machine learning approach was used to clustering the research studies and four major clusters were identified.
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We investigate the role of entrepreneurs’ human capital on the potential of newly created ventures to receive equity funding from Accelerators and Business Angels using a resource-based approach to entrepreneurship theory. Using data from 10,563 for-profit innovative ventures, we find significant differences between those two groups. More specifically, formal education and founding experience of the entrepreneurial team is positively associated with the likelihood of the team to receive equity from Angels but negatively associated with the likelihood of the team to receive equity from Accelerators. Overall, our results are in line with the theoretical argument that human capital signals are important in reducing the information asymmetries faced by angels and ultimately driving entrepreneurs’ success in securing angel funding, but our results also suggest that some aspects of human capital signals do not contribute to the entrepreneur’s success in receiving accelerator funding. Our findings have important repercussions for the quality of design and operation of both private and state supported programmes and accelerator managers.
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Accelerators are the crucial foundations that influence development of the entrepreneurial ecosystem and new venture creations. Although about 10 years have passed since the establishment of the first accelerator in the United States, there are still many dark spots about the accelerator’s operations and services as well as their position and value in the entrepreneurial ecosystem. In this study, an attempt has been made to systematically review the articles published in the field of start-up accelerators to shed light on the dark spots. To this end, 51 articles and review articles published in the Q1 and Q2 journals of the Scopus citation database, were systematically and deeply studied. Parts of the main results of this research include the process of acceleration, the accelerator’s services, the investing framework of accelerators, the success and risk factors of accelerators, and eventually antecedents as well as consequences of an accelerator. Finally, inspired by the Porter's value chain model, the accelerator value chain is presented as the final model of this study.
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Purpose This paper aims to explore coopetition within the entrepreneurial ecosystem and answer the following two fundamental questions: How does coopetition affect the entrepreneurial learning and performance of startups? and What learning strategies should startups adopt to promote their growth in the coopetition activities? Design/methodology/approach Using the structural equation model and instrumental variable, this study used a sample of 371 startups to test the hypotheses. Data comes from startups in Jiangsu, Shanghai and Zhejiang, China. Findings This study finds that the coopetition-performance relationship of startups is marginally negative. This study also finds that exploitative learning and exploratory learning positively mediate this relationship. Ecosystem’s social capital can enhance the coopetition-exploration relationship, but the coopetition-exploitation relationship is not affected. Originality/value Many studies propose that the coopetition-performance relationship is ambiguous, which makes it meaningful to explore startups individually. Based on the resource-based view and the knowledge-based view, this study deepen the works of Bouncken and Fredrich (2016c), that is, how startups can learn and grow through coopetition activities. This study proposes that coopetition is one of the foundations of the ecosystem and explore the coopetition-performance relationship in this special context. Thus, the present paper adds to the budding literature on the effects of the entrepreneurial ecosystem and to the literature on coopetition.
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When do entrepreneurs in emerging markets seek out help from organizational sponsors? Problemistic search theory suggests that entrepreneurs will seek out sponsors in moments of venture distress. However, this theory was developed in the context of large organizations; it is not clear how it might apply to entrepreneurs in resource-constrained contexts. We use three inductive studies conducted in favelas in Brazil to examine when entrepreneurs seek help. Consistent with problemistic search theory, we find evidence that entrepreneurs seek out help from organizational sponsors in moments of venture distress. We also explore what types of entrepreneurs are most likely to seek help in a situation of venture distress and find that entrepreneurs who are more socially embedded and have more social obligations are more likely to take up sponsorship services, leading to important heterogeneity in our results on take-up. We find that women, more mature ventures, and middle-aged entrepreneurs are all more likely to engage in problemistic search. We contribute to a more contextualized theory of problemistic search for small entrepreneurs in emerging markets. We also provide important theoretical and practical insights about the demand-side of organizational sponsorship.
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Professor Wright's body of research on Venture Capital (VC) has advanced the field and has facilitated recent research on new sources of financing for start-ups such as crowdfunding and blockchain. In this article, inspired by Professor Wright's pursuit in encouraging new directions in research, we first demonstrate, with an illustrative study on VC learning, that mixed methods research, which combines quantitative and qualitative data, can be helpful in VC research. We also present some possible mixed methods directions for future research. We conclude with a short and critical discussion on both methods and research practices. In doing so, we hope to stimulate scholars' interest in these underutilised methods.
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Business accelerators are a phenomenon of increasing popularity in practice, but their specific value-added for the participating startups has been understudied thus far. Our study addresses this research gap by investigating how participating in a business accelerator program supports startups to forge relationships with other startups, helping them to overcome their early-stage needs. We use an in-depth exploratory qualitative research approach based on a multiple embedded case study design by studying 23 startups within six accelerators in Germany. We find evidence that startups in accelerators forge specific types of relationships, including both cooperative and competitive elements, characterizing their early-stage needs. They cooperate through joint projects and exchange and compete on the firm level for internal and external resources and on the individual level for reputation, which makes these relationships overall coopetitive. Our findings indicate the importance of accelerators in driving the startups’ relationships, as accelerators trigger “coopetitive” behavior among startups through their available tools, including events, communication and the coworking space. This study contributes to literature on business accelerators and coopetition. Additionally, this study offers implications for startups, accelerators and policy makers.
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Over the past 30 years, Chilean faculty’s progress in terms of size, academic training, and research productivity has been outstanding. In the last decade, the number of faculty in Chilean higher education increased by about 40%, and the number of them holding doctorate degrees doubled. This progress has occurred in the context of multiple national initiatives and policies attempting to migrate the country from an economy based on the exploitation of natural resources to one based on knowledge and innovation. This chapter describes these changes and explores the challenges and opportunities for faculty members in the emerging Chilean knowledge economy and its innovation system. In particular, we discuss issues and new demands surrounding faculty’s research work. This building of research capabilities includes modernizing doctoral education, increasing the participation of women in leadership positions and STEM fields, navigating internationalization, and meeting new demands for outreach with industry and society.
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Die Studie bietet einen empirischen Überblick über den Gesamtbestand an Wagniskapitalfinanzierer in Deutschland. Speziell werden die neuen Formen der Wagniskapitalfinanzierung betrachtet, die neben dem Kapital Beratung, Infrastruktur (IT, Büroraum) und Vernetzung mit Kunden und Partnern anbieten. Für diese Acceleratoren, Inkubatoren und Company Builder werden ihre Anteile an dem Gesamtbestand der Wagniskapitalfinanzierer, der Verlauf ihres Markteintritts, die Anteile selbständiger, Konzern-getragener und staatlicher Inkubationsfinanzierung sowie ihre regionale Verteilung dargestellt. Dabei wird Berlin als der mit Abstand wichtigste Standort vor München und Hamburg identifiziert. Insgesamt hat sich die Inkubationsfinanzierung in Deutschland als ein beachtliches Segment und Alternative zu den traditionellen Wagniskapitalfinanzierern etabliert.
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Purpose For new ventures, access to entrepreneurship assistantship is the main source of growth and innovativeness. Accelerators, a growing provider of entrepreneurial resources, offer such assistantship. This study aims to identify several factors that might account for a startup’s acceptance of accelerator programs. Particularly, this paper examines the impact of a lead founder’s country of birth, gender and education on accelerator acceptance. Design/methodology/approach This study tests the framework with logit regression for a sample of 10,298 observations for startups in 166 countries over 2016–2018. Findings This study finds that entrepreneurs from developing countries are less likely to be accepted by accelerators than entrepreneurs from developed economies. Counterintuitively, this study also finds an advantage for female entrepreneurs in accelerator acceptance. Further, the results suggest a positive impact on education. Building on signaling theory, this paper argues and shows that accelerators do not evaluate applicants uniformly. Practical implications Our comparative study enhances business owners’ insight for application to entrepreneurial resources and has meaningful implications for women’s entrepreneurship. For policy-making purposes, this study offers more insight on economic development for entrepreneurs’ access to global resources. Originality/value Despite the extant literature demonstrating the benefits of accelerators, determinants of acceptance to these programs, particularly at the individual level, are underexplored. This is the first study that shows the rarely acknowledged link between a lead founder’s country of birth, gender and education level on accelerator acceptance. Here, this study extends entrepreneurship literature and shows some sources of variation in access to international accelerator programs.
Article
Despite the popularity of business training among policy-makers, its use has faced increasing scepticism. Most of the first randomized experiments could not detect statistically significant impacts of training on firm profits or sales. I reassess the evidence for whether small business training works, incorporating more recent results. A meta-analysis of these estimates shows that training increases profits and sales on average by 5–10 per cent. This is in line with what is optimistic to expect, but impacts of this magnitude are too small for most experiments to detect. I then discuss five approaches for improving the effectiveness of traditional training by incorporating gender, kaizen methods, localization and mentoring, heuristics, and psychology. The challenge is then how to deliver a quality programme on a cost-effective basis at a much larger scale. Three possible approaches to scaling up training are discussed: using the market, using technology, or targeting and funnelling firms.
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Given the importance of entrepreneurship for economic development through social and economic transformation, entrepreneurship education and training (EET) is growing throughout the world. The research on EET is also expanding and there is a need to better understand the impact of EET on business performance and its differential effect in men and women. Accelerators are entrepreneurship EET programs. Based on human capital theory, the paper uses Accelerators to assess the impact of EET programs on startup business performance. Given that female entrepreneurs’ human capital attributes are different from those of men and that the various components of Accelerator programs have been found to produce a differential effect on women, the paper proposes that Accelerators have the potential to produce a more pronounced positive effect in startups founded by female founders. We test this conjecture by exploring the impact of Accelerators in startup fundraising, in which female entrepreneurs face a significant gap. Our results confirm that female entrepreneurs who go through Accelerators increase their chances of receiving Venture Capital financing and that the marginal effect is larger for female than for male entrepreneurs.
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Venture capital is associated with some of the most high-growth and influential firms in the world. Academics and practitioners have effectively articulated the strengths of the venture model. At the same time, venture capital financing also has real limitations in its ability to advance substantial technological change. Three issues are particularly concerning to us: 1) the very narrow band of technological innovations that fit the requirements of institutional venture capital investors; 2) the relatively small number of venture capital investors who hold and shape the direction of a substantial fraction of capital that is deployed into financing radical technological change; and 3) the relaxation in recent years of the intense emphasis on corporate governance by venture capital firms. While our ability to assess the social welfare impact of venture capital remains nascent, we hope that this article will stimulate discussion of and research into these questions.
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We organized business associations for the owner-managers of young Chinese firms to study the effect of business networks on firm performance. We randomized 2,820 firms into small groups whose managers held monthly meetings for one year, and into a "no-meetings" control group. We find the following. (i) The meetings increased firm revenue by 8.1%, and also significantly increased profit, factors, inputs, the number of partners, borrowing, and a management score. (ii) These effects persisted one year after the conclusion of the meetings. (iii) Firms randomized to have better peers exhibited higher growth. We exploit additional interventions to document concrete channels. (iv) Managers shared exogenous business-relevant information, particularly when they were not competitors, showing that the meetings facilitated learning from peers. (v) Managers created more business partnerships in the regular than in other one-time meetings, showing that the meetings improved supplier-client matching. © The Author 2018. Published by Oxford University Press on behalf of the President and Fellows of Harvard College. All rights reserved.
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The authors summarize 35 years of empirical research on goal-setting theory. They describe the core findings of the theory, the mechanisms by which goals operate, moderators of goal effects, the relation of goals and satisfaction, and the role of goals as mediators of incentives. The external validity and practical significance of goal-setting theory are explained, and new directions in goal-setting research are discussed. The relationships of goal setting to other theories are described as are the theory’s limitations.
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Results of a two-year inductive field study of British ventures show that entrepreneurs are more likely to acquire resources for new ventures if they perform symbolic actions—actions in which the actor displays or tries to draw other people's attention to the meaning of an object or action that goes beyond the object's or action's intrinsic content or functional use. We identify four symbolic action categories that facilitate resource acquisition: conveying the entrepreneur's personal credibility, professional organizing, organizational achievement, and the quality of stakeholder relationships. Our data show that entrepreneurs who perform a variety of symbolic actions from these categories skillfully and frequently obtain more resources than those who do not. Our data also suggest three factors—structural similarity, intrinsic quality, and uncertainty—that moderate the relationship between symbolic management and resource acquisition. We theorize how the various symbolic action categories shape different forms of legitimacy that help entrepreneurs acquire resources.
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Business training programs are a popular policy option to try to improve the performance of enterprises around the world. The last few years have seen rapid growth in the number of evaluations of these programs in developing countries. This paper undertakes a critical review of these studies with the goal of synthesizing the emerging lessons and understanding the limitations of the existing research and the areas in which more work is needed. It finds that there is substantial heterogeneity in the length, content, and types of firms participating in the training programs evaluated. Many evaluations suffer from low statistical power, measure impacts only within a year of training, and experience problems with survey attrition and measurement of firm profits and revenues. Over these short time horizons, there are relatively modest impacts of training on survivorship of existing firms, but stronger evidence that training programs help prospective owners launch new businesses more quickly. Most studies find that existing firm owners implement some of the practices taught in training, but the magnitudes of these improvements in practices are often relatively modest. Few studies find significant impacts on profits or sales, although a couple of the studies with more statistical power have done so. Some studies have also found benefits to microfinance organizations of offering training. To date there is little evidence to help guide policymakers as to whether any impacts found come from trained firms competing away sales from other businesses versus through productivity improvements, and little evidence to guide the development of the provision of training at market prices. The paper concludes by summarizing some directions andkey questions for future studies.
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The authors conduct a randomized experiment among women in urban Sri Lanka to measure the impact of the most commonly used business training course in developing countries, the Start-and-Improve Your Business program. They work with two representative groups of women: a random sample of women operating subsistence enterprises and a random sample of women who are out of the labor force but interested in starting a business. They track the impacts of two treatments -- training only and training plus a cash grant -- over two years with four follow-up surveys and find that the short and medium-term impacts differ. For women already in business, training alone leads to some changes in business practices but has no impact on business profits, sales or capital stock. In contrast, the combination of training and a grant leads to large and significant improvements in business profitability in the first eight months, but this impact dissipates in the second year. For women interested in starting enterprises, business training speeds up entry but leads to no increase in net business ownership by the final survey round. Both profitability and business practices of the new entrants are increased by training, suggesting training may be more effective for new owners than for existing businesses. The study also finds that the two treatments have selection effects, leading to entrants being less analytically skilled and poorer.
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Addresses the centrality of the self-efficacy mechanism (SEM) in human agency. SEM precepts influence thought patterns, actions, and emotional arousal. In causal tests, the higher the level of induced self-efficacy, the higher the performance accomplishments and the lower the emotional arousal. The different lines of research reviewed show that the SEM may have wide explanatory power. Perceived self-efficacy helps to account for such diverse phenomena as changes in coping behavior produced by different modes of influence, level of physiological stress reactions, self-regulation of refractory behavior, resignation and despondency to failure experiences, self-debilitating effects of proxy control and illusory inefficaciousness, achievement strivings, growth of intrinsic interest, and career pursuits. The influential role of perceived collective efficacy in social change and the social conditions conducive to development of collective inefficacy are analyzed. (21/2 p ref) (PsycINFO Database Record (c) 2006 APA, all rights reserved). © 1982 American Psychological Association.
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While organizational processes, such as internationalization, acquisition, and alliance, are a fundamental concept within many literatures and central to firm capabilities, controversy exists regarding how they become high performing. One view emphasizes the role of experience while a second view emphasizes cognition and, in particular, the role of articulated heuristics. Using qualitative and quantitative field data on the internationalization process of entrepreneurial firms from three culturally distinct regions (Finland, U.S., Singapore), we juxtapose these two competing theoretical views to better gain insight into organizational processes and capabilities. The core contribution of our paper is insight into the structure of firm capabilities. Results show that organizational heuristics more closely relate to the development of a high performing process and hence a firm capability. At a broader level, we contribute to strategy by empirically validating the strategic logic of opportunity, a logic that is particularly relevant in dynamic markets and growth oriented firms. We also contribute to entrepreneurship by adding to the opportunity discovery vs. opportunity creation debate, and by shedding light on the relationship between structure and performance in new ventures. Overall, we contribute to the emerging but growing body of research emphasizing a more cognitive view of firms. Copyright © 2007 Strategic Management Society.
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The influence of strategic decision processes on entrepreneurial self-efficacy (ESE), which measures the degree to which entrepreneurs believe themselves capable of managing new ventures, is examined. Following a general discussion of ESE and of strategic decision processes as determinants of self-efficacy, four hypotheses regarding the relationship between the entrepreneur's ESE level and the firm's strategic decision-making processes are offered. Taken together, the hypotheses suggest that an entrepreneur's ESE level is enhanced by strategic decision-making processes that are decentralized, comprehensive, based on current information, and marked by a high number of external participants.Data from a 1999 survey of 95 new firm founder-managers from New York City's "Silicon Alley" community of Internet ventures are used to test the hypotheses. Although the data support three of the four hypotheses, there is no evidence to suggest that the number of external participants in a firm's strategic decision-making process is positively related to the entrepreneur's ESE level.Implications of the findings, as well as directions for future research, are discussed. (SAA)
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This paper argues that it is crucially important to differentiate between two very distinct sets of entrepreneurs: subsistence and transformational entrepreneurs. Recent evidence suggests that people engaging in these two types of entrepreneurship are not only very distinct in nature but that only a negligible fraction of them transition from subsistence to transformational entrepreneurship. These individuals vary in their economic objectives, their skills, and their role in the economy. Most important, they seem to respond very differently to policy changes and economic cycles. Yet most development policies aimed at fostering entrepreneurship focus on subsistence entrepreneurship in the hope of creating transformational entrepreneurs. I argue that unless we understand the differences between those two types of entrepreneurs more clearly, many policy interventions may have unintended consequences and may even have an adverse impact on the economy. Copyright © 2010 by the National Bureau of Economic Research. All rights reserved.
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In this paper, we show that most small business owners are very different from the entrepreneurs that economic models and policy makers often have in mind. Using new data that samples early stage entrepreneurs just prior to business start up, we show that few small businesses intend to bring a new idea to market. Instead, most intend to provide an existing service to an existing market. Further, we find that most small businesses have little desire to grow big or to innovate in any observable way. We show that such behavior is consistent with the industry characteristics of the majority of small businesses, which are concentrated among skilled craftsmen, lawyers, real estate agents, doctors, small shopkeepers, and restaurateurs. Lastly, we show non pecuniary benefits (being one’s own boss, having flexibility of hours, etc.) play a first-order role in the business formation decision. We then discuss how our findings suggest that the importance of entrepreneurial talent, entrepreneurial luck, and financial frictions in explaining the firm size distribution may be overstated. We conclude by discussing the potential policy implications of our findings.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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We test whether managerial human capital has a first order effect on the performance and growth of small enterprises in emerging markets. In a randomized control trial in Puebla, Mexico, we randomly assigned 150 out of 432 small and medium size enterprises to receive subsidized consulting services, while the remaining 267 enterprises served as a control group that did not receive any subsidized training. Treatment enterprises were matched with one of nine local consulting firms and met with their consultants once a week for four hours over a one year period. Results from a follow-up survey, conducted after the intervention, show that the consulting services had a large impact on the performance of the enterprises in the treatment group: monthly sales went up by about 80 percent; similarly, profits and productivity increased by 120 percent compared to the control group. We also see a significant increase in the entrepreneurial spirit index for the treatment group, a set of questions designed to illicit the SME owners’ confidence in their ability to manage their business and deal with any future difficulties. However, we do not find any significant increase in the number of workers employed in the treatment group.
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This chapter discusses how applied researchers in corporate finance can address endogeneity concerns. We begin by reviewing the sources of endogeneity - omitted variables, simultaneity, and measurement error - and their implications for inference. We then discuss in detail a number of econometric techniques aimed at addressing endogeneity problems including: instrumental variables, difference-in-differences estimators, regression discontinuity design, matching methods, panel data methods, and higher order moments estimators. The unifying themes of our discussion are the emphasis on intuition and the applications to corporate finance.
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A long-standing question is whether differences in management practices across firms can explain differences in productivity, especially in developing countries where these spreads appear particularly large. To investigate this, we ran a management field experiment on large Indian textile firms. We provided free consulting on management practices to randomly chosen treatment plants and compared their performance to a set of control plants. We find that adopting these management practices raised productivity by 17% in the first year through improved quality and efficiency and reduced inventory, and within three years led to the opening of more production plants. Why had the firms not adopted these profitable practices previously? Our results suggest that informational barriers were the primary factor explaining this lack of adoption. Also, because reallocation across firms appeared to be constrained by limits on managerial time, competition had not forced badly managed firms to exit. JEL Codes: L2, M2, O14, O32, O33.
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Despite widespread agreement among organizational researchers that intangible resources underlie performance differences among organizations, little empirical evidence exists in the literature. Building on the idea that reputation is socially constructed, this paper depicts reputation as the outcome of the process of legitimation. It observes that organizational researchers have overlooked how certification contests legitimate organizations, generate status orderings, and create favorable reputations. This paper suggests that victories in certification contests are credentials that enable firms to acquire a reputation for competence. It predicts that cumulative victories improve the survival of organizations and better the life chances of startup organizations more than those of lateral entries. These predictions are analyzed in the American auto industry during 1895–1912 when special-purpose product rating agencies were absent and reliability and speed contests served as credentialing devices. The results show that cumulative victories in contests extend the life chances of winning organizations but there is no evidence that new startup organizations benefit more than lateral entries. These findings underscore the significance of intangible assets and point to the need for an institutionally informed theory of competences.
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Strategic entrepreneurship refers to firms' pursuit of superior performance via simultaneous opportunity-seeking and advantage-seeking activities. Both small and large firms face impediments while pursuing strategic entrepreneurship. While small firms' opportunity-seeking skills may be strong, their limited knowledge stocks and lack of market power inhibit their ability to enact the competitive advantages necessary to appropriate value from opportunities the firms choose to pursue. In contrast, large firms are skilled at establishing competitive advantages, but their heavy emphasis on the efficiency of their existing businesses often undermines their ability to continuously explore for additional opportunities. Building on a variety of theories, including network, learning, resource-based, and real options, we suggest that collaborative innovation can enable both types of firms to overcome their respective challenges. Collaborative innovation is the pursuit of innovations across firm boundaries through the sharing of ideas, knowledge, expertise, and opportunities. For small firms, we contend that pursuing entrepreneurship collaboratively allows them to preserve their creativity and flexibility while mitigating the inherent liabilities of smallness. We argue that collaborative innovation permits large firms to exploit their advantage-creating skills while concurrently exploring for opportunities outside their current domain. Thus, small and large firms that learn how to integrate strategic entrepreneurship and collaborative innovation are well positioned to create wealth. Copyright © 2008 Strategic Management Society.
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This paper examines the impact venture capital can have on the development of new firms. Using a hand-collected data set on Silicon Valley start-ups, we find that venture capital is related to a variety of professionalization measures, such as human resource policies, the adoption of stock option plans, and the hiring of a marketing VP. Venture-capital-backed companies are also more likely and faster to replace the founder with an outside CEO, both in situations that appear adversarial and those mutually agreed to. The evidence suggests that venture capitalists play roles over and beyond those of traditional financial intermediaries.
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Summary Business training is a widely used development tool, yet little is known about its impact. We study the effects of such a business training program held in Central America. To deal with endogenous selection into the training program, we use a regression discontinuity design, exploiting the fact that a fixed number of applicants are taken into the training program based on a pre-training score. Business training significantly increases the probability that an applicant to the workshop starts a business or expands an existing business. Results also suggest gender heterogeneity as well as the presence of financial constraints.
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A strong theoretical argument for focusing on access to finance is that financial market imperfections can result in large inefficiencies, as firms with productive investment opportunities underinvest. Lack of access to finance is a frequent complaint of microenterprises, which account for a large share of employment in developing countries. However, assessing the extent to which a lack of capital affects their business profits is complicated by the fact that business investment is likely to be correlated with a host of unmeasured characteristics of the owner and firm, such as entrepreneurial ability and demand shocks. In a randomized experiment that gave cash and in-kind grants to small retail firms, providing an exogenous shock to capital, the shock generated large increases in profits, with the effects concentrated among firms that were more financially constrained. The estimated return to capital was at least 20–33 percent a month—three to five times higher than market interest rates.