Startup accelerators have become a crucial component of the entrepreneurial ecosystem, providing early-stage ventures with funding, mentorship, and access to valuable networks. However, not all accelerator programs deliver the same level of success. Recent research by Assenova and Amit (2024) analyzes 8,580 startups from 408 accelerator programs in 176 countries to determine how program design impacts startup performance.
This study reveals that while accelerators generally improve startup outcomes, their effectiveness varies significantly based on their cohort composition, industry focus, and educational structure. In this article, we break down the findings and explore which factors contribute to startup success after acceleration.
The study examines how accelerator design impacts startup performance, helping founders choose the best program. This post represents a series of articles related to a research and dissertation called “Are corporate accelerators springboards for startups: a performance analysis of the Microsoft’s and Google’s accelerated startups“.
How Accelerators Impact Startup Performance
Accelerators offer a variety of resources, but their effectiveness depends on how these resources are structured. The study found that startups that participated in accelerator programs outperformed those that were selected but did not enroll.
Key benefits of accelerator participation
Startups that participated in well-structured accelerator programs experienced increased venture capital (VC) funding, securing more investment compared to non-accelerated startups. Additionally, programs with an industry-specific focus enabled startups to scale faster, leading to higher revenue growth. Moreover, accelerated startups demonstrated stronger employment growth, hiring more employees and offering higher wages than their non-accelerated counterparts.
Despite these benefits, the study highlights that not all accelerators are equally effective. Their design plays a crucial role in determining startup success.
Key Factors in Accelerator Success
Cohort Composition: Knowledge Depth vs. Breadth
The way accelerators select and group startups influences their long-term success. The study identifies two main approaches of cohorts: deep knowledge and broad knowledge. Deep knowledge cohorts are accelerators that focus on one industry, allowing startups to gain specialised knowledge and faster revenue growth. On the other hand, broad knowledge cohorts are programs that accept startups from various industries, offering exposure to diverse networks and leading to higher venture capital investment.
| Cohort Type | Best For | Impact on Startups |
|---|---|---|
| Industry-Specific (Deep Knowledge) | Startups looking for sector expertise | Higher revenue scaling |
| Industry-Diverse (Broad Knowledge) | Startups in emerging fields | Better funding access |
Structured Educational Programming
Another critical success factor is the educational support provided by accelerators because the study found that structured educational programming disproportionately benefits less-experienced founders. First-time entrepreneurs benefit more from structured courses and workshops, as these provide essential business knowledge, strategic planning skills, and financial management insights that help them navigate the early stages of startup development. In contrast, experienced founders gain greater value from mentorship and networking opportunities, which offer high-level strategic guidance, industry connections, and access to investors that accelerate business growth. While structured education helps new entrepreneurs build a strong foundation, seasoned founders rely on relationships and expert advice to refine their strategies and scale their ventures effectively.
| Program Element | Best For | Impact on Startups |
|---|---|---|
| Formal Business Education | First-time founders | Stronger business model development |
| Mentorship & Networking | Experienced founders | Faster scalability and funding |
Program Design and Funding Mechanisms
Startups that secure initial funding within an accelerator tend to perform better post-acceleration. Such characteristics are detailed below:
- Pitching Events: Most effective for tech startups and early-stage ventures.
- Seed Funding: Consistently beneficial across industries.
- Longer Programs (6+ months): Provide greater long-term success for startups in complex markets.
Conclusions and Final Thoughts
The research by Assenova and Amit (2024) highlights that not all startup accelerators are created equal. While most programs improve startup performance, their effectiveness depends on how they are structured, whom they serve, duration, and how the financial support is provided.
Key Takeaways
- Cohort Composition Matters: Industry-focused programs drive revenue growth, while diverse cohorts enhance funding opportunities.
- Education is Key: Structured programs benefit inexperienced founders, while experienced entrepreneurs gain from networking and mentorship.
- Funding and Support Drive Success: Programs that offer pitching events and seed capital give startups a stronger foundation.
Entrepreneurs seeking an accelerator should select a program that aligns with their startup’s industry, growth stage, and level of experience. Understanding how accelerator design impacts success enables founders to make more informed decisions that support the growth and sustainability of their businesses.
Frequently Asked Questions (FAQs)
The study found that accelerator programs help startups raise more venture capital, increase revenue growth, and hire more employees compared to non-accelerated startups.
No. The effectiveness of an accelerator depends on its cohort structure, industry focus, and educational programming. Programs with strong mentorship, structured learning, and tailored industry expertise tend to produce the best results.
It depends on your startup’s needs. If you need specialized knowledge and deep industry insights, an industry-specific accelerator is best. If you're looking for broader exposure and diverse investment opportunities, a generalist accelerator may be better.
Longer programs (6+ months) tend to offer better long-term outcomes, but short programs with intensive mentorship can also be effective.
First-time founders gain more from structured learning programs, while experienced founders tend to benefit morefrom mentorship and networking.
References
- Assenova, V. A., & Amit, R. (2024). Poised for growth: Exploring the relationship between accelerator program design and startup performance. Strategic Management Journal. https://doi.org/10.1002/smj.3581
