We investigate the impact of an entrepreneurial amenity for urban agglomeration, accelerator programs, upon start-up ﬁrm’s private equity performance. Accelerators are ﬁrm development programs that utilize physical space, human capital development programming, mentorship, ﬁnancial capital, and community engagement to accelerate the ﬁnancial feasibility of start-up ﬁrms. A sample of US accelerator treated and matched control ﬁrm’s over the 2005 to 2015 period yields a study of 16,720 ﬁrms. Results indicate that there is statistically signiﬁcantly more cumulative funding for accelerated ﬁrms, when taking into consideration the endogenous choice and selection of start-up ﬁrms into programs and series stage in cumulative funding. Secondly, we assess variation across accelerator participation timing and ﬁnd that ﬁrms with pre-funding when coming into an accelerator leads to higher cumulative funding. Lastly, we document accelerator program’s ability to cultivate agglomeration through space and programming amenities like free physical space, program length, program cohort size, investor equity stake and scale of capital injection impacts upon cumulative funding. This study supports evidence of correlation between start-up ﬁrm performance and accelerator program amenities. Accelerators can have signiﬁcant impact on the life-long health of young private-equity ﬁrms and can be considered as a public and private tool to create economic growth post-Covid-19.
Is Innovation Really in a Place? Accelerator Program Impacts on Firm Performance