Factors Impacting Entrepreneurial Success in Accelerators: Revealed Preferences of Sophisticated Mentors

There is a debate within the academic literature as to when during their venture’s development an entrepreneur should augment their identification of a sustainable business model with a consideration of corporate development and financing issues. Drawing upon stakeholder theory, agency theory, and signalling theory, this paper identifies that all three types of development objectives need to be pursued from the very earliest stages of the development of certain ventures. Analysing novel new detailed data, this paper finds that mentor support for a science-based very early-stage venture does not solely depend upon its characteristics upon entering the program but is impacted by interactions between the entrepreneur and potential mentors. In addition, mentors are found to advise entrepreneurs to pursue a broad range of growth objectives as opposed to solely focusing on identifying a sustainable business model. The paper also notes that entrepreneurs who are balanced in the pursuit of their strategic, organizational development, and financing goals are significantly more likely to gain mentor support. One explanation for this later finding is that mentors view an entrepreneur’s understanding of the polycentric nature of venture development as a signal of managerial competence. These findings are consistent across different types of industries and across time. A final contribution of the paper entails a discussion of potential ways to overcome the conflicts of interest that have been previously identified in the literature between angels and venture capitalists financing companies within accelerators. This paper helps resolve debates within the academic entrepreneurship literature and provides insights of interest to practitioners.