When it comes to addressing major social and environmental issues, many people think that we will unlock the full force of the private sector if we can identify and accelerate highpotential social entrepreneurs. However, entrepreneurs with the most promising ideas for scalable impacts are not always wellpositioned to scale their businesses profitably. This is where incubators and accelerators enter the picture.
As a whole, these entrepreneur support programs attract lots of resources that are deployed to implement a range of different acceleration practices; those that identify promising earlystage ventures, inject knowledge through innovative curricula and mentorship programs, and provide access to earlystage growth capital. While these efforts are producing an impressive array of options for social venture development, we are lagging in our understanding of which programs and practices are actually working.[1]
Working with the Global Accelerator Learning Initiative (GALI), the Entrepreneurship Database program at Emory University is addressing this problem. By partnering with a number of accelerator programs around the world, this initiative collects comparable longitudinal data from the thousands of entrepreneurs who apply to one of these programs.[2] By collecting detailed data during the application process and then tracking all entrepreneurs over time, we gain insight into what social entrepreneurs and ventures look like when then apply to accelerators, and what happens to them during the acceleration process.
For example, one recent analysis shows how gender is implicated in the ability to access early-stage investment. Ventures with at least one female founder are at a significant disadvantage when it comes to attracting outside equity, a bias that is only partially offset by an advantage when it comes to attracting philanthropic investment (see Access to StartUp Financing).
* See Data Brief on Gender & Entrepreneurship
Another recent analysis suggests that participation in accelerator programs may offset some of the problems associated with attracting earlystage investment. Data from three waves of follow-up surveys indicate that accelerated companies are attracting more outside investment than their rejected counterparts, at least during the year in which accelerator programs are run (see Changes in Total Investment).
* See 2015 MidYear Data Summary
These initial observations are provocative, but currently insufficient for the task at hand.
The Promise of More Data
Every year, additional accelerator programs are joining this initiative, adding thousands of new ventures to the database. At the same time, each wave of followup surveying adds one additional year of data for participating ventures.[3]
The value of these data increases with the number and quality of research projects that they stimulate. As such, we are recruiting academic researchers to (for example) calibrate the effects of acceleration on revenue, employment and investment growth, and then determine how these effects differ for womenled ventures.
Other researchers are focusing on individual accelerator programs, and how specific program choices influence their effectiveness. One current study leverages data collected from 15 different Village Capital programs. Every VilCap program shares the same overall orientation and structure. However, their programs are run in different locales and with different sector foci. This project starts by examining programspecific data to hone in on interesting performance contrasts (see Changes in Total Investment across VilCap Programs).
Then, quantitative and qualitative techniques are used to generate and vet different hypotheses about why some programs seem to produce superior results. When the project is completed in early 2016, its findings will allow VilCap program managers, as well as managers at other programs, to refine their programming to produce even better results in the years ahead.
In the coming months and years, GALIsupported research projects will complement the wide-ranging experimentation by different accelerator programs by showing which practices work best in different entrepreneurial settings. These accumulating insights will ensure that scarce resources are flowing to more effective programs and practices. As the datadrive insights stimulate better programming, we stand a much better chance of realizing the promise that is housed in earlystage social entrepreneurs around the world.
[1] Kempner, Randall. 2014. “Incubators Are Popping Up Like Wildflowers...But Do They Actually Work?” Innovations, 8:34, pp. 36.
[2] The 2015 MidYear Data Summary houses data describing 3,113 ventures whose founders applied through 44 different programs and channels.
[3] Followup surveys are administered every six months. So far, followup survey response rates have been above 40% for rejected entrepreneurs and above 70% for ventures selected for participation.