Smith Entrepreneurship Research Conference Uncovers Whether Accelerators Really Accelerate

In late April, the Robert H. Smith School of Business hosted the Smith Entrepreneurship Research Conference (SERC), an annual conference designed to highlight important entrepreneurship-focused research papers. The invitation-only conference, which is attended by prominent researchers and rising stars, helps researchers determine best practices in linking researchers’ findings to practitioners’ goals. SERC discussions are focused on relevant social, economic and organizational issues in the entrepreneurship field.

This year, the Dingman Center for Entrepreneurship’s academic director, Brent Goldfarb, facilitated an engaging panel on the role of accelerators in venture creation. An associate professor in Smith’s management and organization department, Goldfarb moderated The Growth and Efficacy of Accelerators, which drilled down on whether an accelerator impacts the success of startups.

Joining Goldfarb were panelists Susan Cohen, assistant professor of management, University of Richmond’s Robins School of Business; and Deborah Tillett, president and executive director, Emerging Technology Centers (ETC).

“The panel was important in that it both brought researchers up to speed on the pressing dilemmas accelerator practitioners are having and gave valuable information that faculty can now integrate into their curricula,” said Goldfarb.

Cohen, who co-runs the Seed Accelerators Ranking Project, kicked off the discussion with key findings from her working paper, “Do Accelerators Accelerate? A Study of Venture Accelerators as a Path to Success.” She concluded accelerators do in fact accelerate time to funding, time to product and time to failure.

Tillett, who runs Accelerate Baltimore, agreed with Cohen’s determination. The conversation quickly turned to the true definition of an accelerator—everyone agreed that while accelerators are becoming more prevalent, some using the title are actually not accelerators at all.

The key differentiator between an accelerator and an incubator is the fixed term component, Cohen and Tillett explained. Cohen referenced the Brookings Institute study that documented 800 entities calling themselves accelerators, when only 150—or about 18 percent—actually are.

“Accelerators have gone vertical because density is critical,” Tillett said. “You need an environment that people think ‘This is the place I need to be,’ a vibrant social, helpful environment.”

While Cohen’s research revealed there hasn’t been a successful IPO from an accelerator, there are a few big success stories coming out of national incubators, including DropBox and AirBnB. Both came out of Y Combinator headquartered in Mountain View, Ca., an incubator with an invaluable alumni listserv, according to Goldfarb.

So are there too many accelerators out there? Many have recently closed, but others opened with a huge increase in the number of university-run accelerators. Both Cohen and Tillett agreed accelerators help entrepreneurs get somewhere faster, but the “where” is determined by the founding team. It could be fast to funding or fast to fail.

To close out the panel, the Dingman Center presented three cash awards to researchers whose papers made an impact in the field of entrepreneurship:

Gareth Olds, assistant professor of business administration, Harvard Business School

Olds received the top prize for his paper, "Entrepreneurship and Public Health Insurance." He found publicly provided children’s health insurance led to an increase in entrepreneurship as employees were more willing to take the plunge when they knew their children would have access to health care. Without it, they were more likely to stay in their jobs where health insurance was guaranteed. Olds was awarded $1,000.

Dan Wang, assistant professor of business, Columbia Business School

Wang received a $250 award for his paper, "When do returnees become founders? Cultural barriers and boundaries to entrepreneurial transitions." He studied when workers returning from the United States are more likely to start companies in their home countries. He finds entrepreneurship is more likely when the home culture is more accepting of risk taking and failure.

Laura Huang, assistant professor of management, Wharton

Huang received a $250 award for her paper, “Gender bias, social impact framing and evaluation of entrepreneurial ventures." Her work, while early, suggests evaluators are more likely to favor a project when it fits their gender stereotypes. In particular, she focused on the social impact of a venture that leads to higher evaluations when the entrepreneur is a woman.