The impact of accelerator programs on startups

The impact of accelerator programs on startups

Name: Koen de Leeuw

Student number: 2135892

Msc BA track: Small Business & Entrepreneurship

Supervised by:

Olga Belousova (University of Groningen)

Maarten Korz (Rabobank)

Co-assessor: Arjan Frederiks

March 2018

Abstract

The three most important services of the accelerator program are identified: education, networking and mentoring. The aim of accelerator programs is to accelerate the development of the startups, the most essential capitals for young firms that aim to growth are human and financial capital. This research made a model to test the impact of accelerator programs, based on the services and important capitals and their impact on human and financial capital. The research provides a view on the impact of accelerators in general, and focuses also on a better understanding of the differences between types of accelerators.

The two types researched are The Welfare stimulator and Deal-flow maker. This study contains two case studies and a cross-case analysis. For both cases are ten startups and a program manager interviewed, this gave us insights in the impact of the programs. Accelerator programs have impact on startup’s human capital by facilitating networking, mentoring and education, but has a limited impact on startup’s financial capital by networking and mentoring.

The two types of programs are compared with each other, education has a higher impact on startups from the Welfare stimulator due to less entrepreneurial and market experience of the

Foreword

Life is like a rollercoaster, that is not only the case for startups who participate in an accelerator program, this applied to me during the process of writing my thesis as well. The start was my preliminary course of the master thesis. No one in the family had real alarming health issues, this changed during the period when I had to write my thesis. The two persons who inspired me to study what I study today experienced serious health problems. The first one is my dad, he inspired me with his perseverance to study business management. He finished ago his MBA twenty years ago, and is now a busy businessman. At the moment, he is recovering, however, the first signs are good. He is not fully recovered yet, but he will be hopefully soon. Not fully recovered yet, hopefully soon. Since he graduated, I kept interested in business education and therefore, this is one of the reasons I decided to study Bedrijfskunde (Business management).

My grandfathers have the unusual habit of passing away just before I graduate. Opa Theo did it a few months before I received my Bsc. Bedrijfskunde diploma, a few weeks ago my second grandfather died, and this time just before I finish my masters. He inspired me to think about a career as an entrepreneur, and study MSc. Small Business & Entrepreneurship’. He successfully started a business 30 years ago, the company provided engineering solutions for the food- and chemical industry. That made me curious about what it would take to be an entrepreneur. Luckily I could interview him for one of my master courses (New Ventures & Entrepreneurship). Inspired by opa Ferd, I decided to go abroad, to a Malaysian startup to see how it is like to work in an entrepreneurial company. This startup participated at that moment in the MAGIC Program, a government funded accelerator program for the most promising startups of South-East Asia. After I experienced the accelerator program as an employee of a startup, I was wondering what the impact was of these programs. But more importantly how do entrepreneurs experience the participation in the program. During my stay, I experienced it mainly as a distraction from the day to day business. Due to these interests and experiences I decided to write my thesis about the impact of startup accelerator program.

Besides to the persons who I already named, I like to thank Olga Belousova for her support. She really helped me with this though period, not only the family circumstances were hard, but the master thesis wasn’t easy either. Thank you for your feedback and help during the whole process, I couldn’t have done it with your support, I really appreciate it! I would also like to thank the second reader.

From Rabobank I like to especially thank Maarten Korz and Edwin de Ron who invited me to write my thesis at Rabobank. After they received an email from Janine Vos (Head HR Rabobank group), who I contacted via the email that I found via an ‘e-mail finder tool’. Sometimes you need a bit of luck, that is what can a startup make successful, and this time made it me happy, to write my thesis in a great team. Next to Maarten and Edwin, I discussed my thesis in-depth with multiple colleagues of

Index

Comparison between ‘Welfare stimulator’ & ‘ Deal-flow maker’... 4

Important resources for new organizations to growth ... 4

Human Capital ... 4

General Human capital ... 5

Specific Human capital ... 5

Financial Capital ... 5

Education ... 6

The impact of education on human capital ... 7

Networking ... 10

The impact of network partners on human capital ... 11

The impact of network partners on financial capital ... 12

Mentorship ... 14

The impact of mentorship on human capital ... 14

The impact of mentorship on financial capital ... 15

Conceptual model ... 15

Methodology ... 16

Define the research question ... 16

Creating the interview guide ... 16

Interview Type ... 16

Interview questions ... 18

Recruiting the participants ... 18

Data Collection ... 19

Welfare stimulator ... 20

Deal-flow Maker ... 20

Results ... 22

Case: ‘Welfare stimulator’: YES!Delft ... 22

Education ... 22

Network partners ... 25

Mentor ... 34

Case ‘ Deal-flow Maker’: HighTechXL ... 40

Education ... 40 Network Partners ... 44 Mentor ... 54 Cross-Case Analysis ... 60 Education ... 60 Network Partners ... 63 Mentor ... 68

Conclusion & recommendations ... 71

Conclusion ... 71

Education ... 71

Comparison between Welfare Stimulator and Deal-flow maker ... 72

Network partners ... 72

Mentoring ... 75

Discussion & theoretical contributions ... 75

Limitations ... 77

Suggestions further research ... 78

Recommendations for future policy ... 79

Recommendations accelerator programs ... 79

Startups ... 80

Governments ... 80

Corporate organizations ... 80

References ... 81

Appendix A: Literature Interview Questions ... 86

Appendix B: Interview Questions Startups ... 87

Appendix C: Interview Questions Program Managers ... 92

Appendix E: Interviews Program Managers ... 94

Interview program manager YES!Delft (Welfare stimulator) ... 94

Introduction

Over the last five years a new generation of the incubation model was introduced in Europe, the accelerator (Pauwels, Clarysse, Wright & Van Hove, 2016). An accelerator is a program with limited duration that offers education, network partners, mentorship and office space to a startup (Wise & Valliere, 2014). The first accelerator was founded in 2005 in Silicon Valley, the Y Combinator. Within thirteen years the number of accelerators increased rapidly worldwide, with currently almost 600 accelerators programs, and the number is still growing (Gust.com).

The acceleration model became popular because of the shortcomings of the existing incubation models. The existing models were focused on providing office space and in-house business services (Pauwels et al., 2016). Nowadays startups are also interested in short intensive training and

education, and in some cases a small amount of funding in exchange for a part of the startup’s equity (Wise & Valiere, 2014).

Different types of accelerator programs exist, because the founders of the programs have different needs. The three types of accelerators that exist are: Ecosystem builder”, “ Deal-flow maker” and the “Welfare stimulator’’. All accelerator types are built to facilitate startup and grow, but each has a different goal with the growth of startups. Corporate organizations use the “Ecosystem builder” as tool to tap into innovation and talent. The “Welfare stimulator” is used by universities to promote student entrepreneurship, while the same type accelerator is also used by development agencies (governments) to increase employment. The “ Deal-flow Maker” accelerators are supported by business angels and venture capitalist who invest in the participating startups to make a financial profit (Pauwels et al., 2016).

There is limited research available on accelerators in academic journals (Pauwels et al., 2016; Cohen, 2013). Accelerators are such a new phenomenon that a lot of research is still needed to properly assess the value of the programs to entrepreneurs and startup ecosystems (Hochberg, 2016;

Hathaway, 2016). Recent articles investigated the different types of accelerators, and their impact on startups (Pauwels et al., 2016; Wise & Valliere, 2014).

An accelerator program offers three main services: education, network partners and mentorship. The service education consists of masterclasses and workshops given during the program, these focus on topics such as business and market knowledge (Cohen, 2013). Second, the accelerator program introduces startups to program’s network partners, such as tax & legal advisors, investors and customers (Cooper, Hamel, & Connaughton, 2012). Third, the service mentorship offers an external coach who helps a startup on a frequent basis (Patton & Marlow, 2011). The aim of the accelerator programs is to accelerate growth of the startups. The two most important capitals for startups aiming to grow are financial capital and human capital (Gilbert, McDougall, & Audretsch, 2006). To investigate what the impact of an accelerator program is, this research will look into the accelerator services, and their impact on financial and human capital of startups.

Literature review

Accelerator program

Accelerators are organizations that aim to accelerate successful venture creation and growth by providing specific incubation services, focussed on education and mentoring, during an intensive program of limited duration (Pauwels et al., 2016; Wise & Valliere, 2014). Hochberg & Fehder (2015) add to this definition that the accelerator programs end with a “Demo day” where graduates of the program pitch their startup to potential investors. While there are different types of acceleartors and specific settings, the general goal of an accelerator is to accelerate the lifecycle of a startup, this could mean a faster growth or failure. Firms that participate in an accelerator may avoid a process of trial and error and ascend more quickly through the learning curve. These ventures are able to make better decisions and have a better strategy, which leads to a higher firm performance (Bruneel, Ratinho, Clarysse, & Groen, 2012). There are currently many debates, both regarding the definition of an accelerator (in theory and in practice it is difficult to distinguish between an incubation and acceleration programs, as they are often executed as hybrids), and its effectiveness. As such, Cohen (2013) doubts whether accelerators are actually effective and suggest that only top accelerators allow their startups to pass the milestones faster.

Accelerator programs are cohort based (Pauwels et al., 2016; Cohen, 2013, Wise & Valliere, 2014), this means that a group of startups enter and exit the program at the same time. The idea behind this is that entrepreneurs can learn from each other since startups could face similar problems during the program. The participants of the accelerator program benefit from education provided by the accelerator. Besides the education, entrepreneurs also have the chance to meet mentors. This is one of the most valuable parts of the accelerator program regarding entrepreneurs, including the

network development (Cohen, 2013). So the accelerator program enables startups to acquire missing resources in a cost effective and timely manner (Van Weele, 2016).

Some of the accelerator programs provide funding to startups. The amount accelerators commonly invested is between $0 and $50,000 (Cohen & Hochberg, 2014) in return for an equity stake of 5 to 8% (Hochberg, 2014). The need for funding is an important reason why ventures enter an accelerator program (Wise & Valliere, 2014), as since the financial crisis of 2008 it is harder for young ventures to loan money from banks (Radojevich-Kelley, 2012). However, not all the accelerator programs provide funding in exchange for equity, they also could give startups the opportunity to meet potential investors.

Types of accelerators

The accelerator’s design theme is the basis for a particular type of accelerator and orchestrates and connects the different elements. The themes are determined by the objectives of the affiliated stakeholders, respectively corporates, investors and government agencies (Pauwels et al., 2016). Pauwels et al. (2016) identifies three types of accelerator programs. The “Ecosystem Builder” builds an ecosystem around the corporate venture. The “ Deal-flow” maker identifies investment

Deal Flow-Maker

Deal-flow maker accelerators are oriented on investments. The program buys equity of a startup, in exchange the company receives funding and services of the accelerator. The primary goal of the Deal-flow maker is to generate positive financial returns by selecting and investing in the most promising startups (Pauwels et al., 2016). The investors in this type of accelerators are business angels, venture capital funds and/or corporate venture capital funds. They provide a bridge between the equity gap of early-stage projects of the startups and invesTable business (Pauwels et al., 2016). The mentors of a Deal-flow maker are experienced entrepreneurs or business angels who can provide startups with advice and feedback by their entrepreneurial experience. The advice of experienced entrepreneurs is a reason for startups to participate in a Deal-flow the mentors are familiar with the problems that startups experience (Pauwels et al., 2016). The ventures could build up network themselves, or with help of the program, and accelerate their business during the

program. The program ends with a “Demo Day’’ which could result in new funding to further expand. The Deal-flow makers have a general or a one specific sector strategy. An example of a specific program is Startupbootcamp IOT in London. Startupbootcamp can develop a program that fits the needs of startups in its specific sector. Another advantage of the Deal-flow maker accelerator is that they have more knowledge about the sector, because of industry experience of program employees, which gives them the possibility to select easier the most promising startups.

Welfare stimulator

Welfare stimulator programs are designed to stimulate the activity of startups and economic

development. This could help the region with more employment and welfare. Therefore, it is called a Welfare stimulator (Pauwels et al., 2016). The most Welfare stimulators do not focus on a specific niche, it has a more generalist, local and/or international focus (Pauwels et al., 2016). Startups are in a very-early stage when they are selected to participate in the program. This is one of the reasons why the Welfare stimulator has the most extensive and developed training program of the three accelerator types (Pauwels et al., 2016). The mentoring service is provided by entrepreneurs and business developers, they could for example help with the commercialization of technology.

Welfare stimulators are funded by local, national and international schemes, experimenting to find a sustainable financial model (Pauwels et al., 2016). The public sponsors could ask for some kind of revenue in return for their financial support. The most Welfare stimulators see the typical model as an option in which they invest time and/or money in exchange for startup’s equity, or programs have an alternative revenue stream, for example the program could ask for a participation fee (Pauwels et al., 2016).

The Ecosystem builder

support an accelerator is to create a spirit of entrepreneurship within the corporate organization. Accelerators also have impact on the brand image of the corporate, they make the corporate look more flexible and innovative both internally and externally. This makes the company more attractive to current and future employees, customers and media (Kanbach & Stubner, 2016). Motives of startups to participate in a corporate accelerator are access to financial and human resources, increased credibility, access to the market and access to funding (Kohler, 2016).

Comparison between ‘Welfare stimulator’ & ‘ Deal-flow maker’

The three types of accelerators, as described above, are all serving other needs for the founders of the program. The “Ecosystem Builder” focuses on startups who add value to the proposition of the corporate organization. Startups who participate could focus their business more on the corporate organization, which could have influence on their demand for human and financial capital. For example, when a startup focuses more on a niche which is interesting for the corporate organization. At the “Welfare stimulator” and “ Deal-flow maker” the startups are more independent, they are not directly selected to add extra value to the core business of a corporate organization, so can develop their company independently and not focused on one organization. The startups of these two programs have the freedom to select the market which suits them best., The “Welfare stimulator” and “ Deal-flow maker” are better comparable with each other and therefore this research focuses on these two types of accelerator programs

Important resources for new organizations to growth

Accelerator programs try to facilitate the growth of startups, important are the resources. Firm resources include all assets, capabilities, organizational processes, firm attributes, information, knowledge etc. controlled by a firm that enable the firm to conceive and implement strategies that improve its efficiency and effectiveness (Barney, 1991). New venture growth is most often found to be related to two resources (Gilbert et al. 2006), financial capital (Cooper, Gimeno-Gascon, & Woo, 1994; Lee, Lee, & Pennings, 2001), and human capital (Cooper et al., 1994),. Strong theoretical arguments suggest that human capital has a positive effect on the growth and failure of a business (Rauch & Rijsdijk, 2013). For new firm’s financial capital influences the sales and employment growth (Cooper et al., 1994).Constraints in financial and human capital may increase the failure chances of growing businesses (Rauch & Rijsdijk, 2013). Attracting resources is one of the greatest challenges faced by entrepreneurs of new ventures, because they lack both a track record and reputation, which heightens the risk perception of potential resource providers (Gilbert, McDougall, & Audretsch, 2006).

Human Capital

specific and general human capital have a positive effect on business outcomes on company’s growth, and decreases chance of failure (Rauch & Rijsdijk, 2013).

General Human capital

General human capital is not directly related to a specific job, it includes years of schooling and working experience. General Human capital is an important source of knowledge, skills, problem-solving abilities, discipline, motivation and self-confidence, (Cooper et al., 1994). Moreover, general human capital increases the quality and consistency of the delivered work (Mincer, 1974) , which helps to run a business successfully. Multiple research papers confirm the interest of investors in general human capital (Parker & Van Praag, 2006; Rauch & Rijsdijk, 2013), which is a predictor of venture growth and survival (Cooper et al, 1994; Dahlqvist, Davidsson, & Wiklund, 2000; Rauch & Rijsdijk, 2013).

General human capital motivates people to acquire new knowledge that helps individuals adapt to new situations (Davidsson & Honig, 2003). For example, when startups aim to grow for a long period, they may need broad and new knowledge about growth management. The acquired knowledge helps the entrepreneur to make better decisions, which increases the chance for success.

Specific Human capital

In contrast to general human capital, specific human capital is relevant for certain tasks at a specific period. There are three indicators of specific human capital, these are industry-specific experience, entrepreneurial experience and management experience (Bruederl, Preisendoerfer, & Ziegler, 1992). Industry experience help startup teams with market knowledge, this could be used to identify profiTable niches or increase productivity (Rauch & Rijsdijk,2013). Experience as a manager helps to manage the startup’s employees, and motivate the enterprise to grow (Cooper et al., 1994).

Entrepreneurial experience helps entrepreneurs with skills and knowledge to develop a new venture (Rauch & Rijsdijk, 2013), which is also beneficial for the business knowledge of the company. This provides the startup founders insights in what is needed to develop a startup (Rauch & Rijsdijk, 2013). The three specific experiences described help to run a business. Specific human capital is not always associated with growth, but also helps the company to maintain in a financial attractive niche. The knowledge of the specific human capital is not easily transferred to another context, because it is relevant for a specific situation (Shepherd & Wiklund, 2006).

During the accelerator program startups are able to acquire new skills and knowledge, which is a characteristic of general human capital. The needs of companies depend on their specific previous experience, for example when someone was active in a specific industry for years, the accelerator program can make less impact with their services on market knowledge for this specific startup. However, it can make more impact on other areas, where the startup has a lack of knowledge. So, the impact of the accelerator will differ per startup, because of the different needs.

Financial Capital

required to achieve growth is generally beyond what a startup entrepreneur owns or what can be obtained by their personal network (Gilbert et al., 2006). The most important reason for

entrepreneurs to participate in an accelerator program according to Van Weele (2016) is access to tangible resources (i.e. financial capital). The competence of an entrepreneur to gain external funding is of high importance for growing the firm and survival (Cohen B. , 2006; Cooper et al., 1994; Gilbert et al, 2006; Lee, Lee, & Pennings, 2001). External funding can be obtained via private

investors or public funding agencies (Van Weele, 2016). Financing startups area high risk for

investors, due to the newness and complexity of the technology (Carpenter & Petersen, 2002), this is the reason why many startups find it hard to attract finance. Accelerator programs can help with funding via an investment in exchange for equity or by bringing startups in contact with parties who provide external funding (Van Weele, 2016). One of the external funding resources is public funding, here capital is provided by (semi-)government to stimulate research or the economic development. The most preferred way for startups to receive funding is via a grant or subsidy (Van Weele, 2016). On the second place is external funding through private investors, these are business angels and venture capitalists (Pauwels et al. 2016). The aim of these investors is to make profit. Entrepreneurs favor to receive funding in exchange for equity, instead of receiving it as a loan (Carpenter & Petersen, 2002). Funding in exchange for equity is a common financing method for startups (Van Weele, 2016).

Education

Education is one of the three services an accelerator program facilitates for entrepreneurs to help them accelerating their business. Education often includes educational seminars on a wide range of entrepreneurship topics (Cohen, 2013). The seminars could be given as a workshop or as

masterclasses dedicated to specific issues like technology, market and management (Battistella, De Toni, & Pessot, 2017). Seminars are usually given by either the directors of the program or by guest speakers, who often provide one-on-one guidance after their talks (Cohen, 2013).

The opinion on whether startups consider education as important differs across literature. According to Regarding Cohen & Hochberg (2014), education is one of the most important reasons for startups to participate in an accelerator program. While the research of Van Weele (2016) contradicts this, he concluded that most startups do not consider education as an important reason to participate. Training has been found to positively influence accelerator program participant’s performance (Pena, 2004). During educational seminars, entrepreneurs acquire knowledge and skills in a wide range of entrepreneurial topics, which helps to compensate their limited experience, and connect them to speakers who are experts in their fields (Bruneel et al., 2012; Cohen, 2013).

develop a highly advanced product without a market need. The entrepreneurs are more focused on technical capabilities than on specific solution for the customer. Education on market knowledge could help startups to focus more on the demand of the customer(Bhuian, Menguc, & Bell, 2005).

Management knowledge or business knowledge is the third type of knowledge, it refers to

knowledge about how to start, manage and grow a business and also includes knowledge on hiring employees, raising capital, defining a business plan and drawing contracts (Van Weele, 2016). The education on business knowledge is especially important in the high-tech industry where startups are often founded by entrepreneurs who have a technological background, but a lack of entrepreneurial experience (Bruneel et al., 2012). One of the problems that entrepreneurs face is to translate their technical idea into a viable business model (Oakey, 2003; Patton, 2014). With the education on business knowledge, entrepreneurs get help to improve their business skills and knowledge.

The impact of education on human capital

Accelerator programs provide education on certain topics, this helps to improve the human capital of startups. In general the impact of education on participants of the accelerator program is considered an important part of the nurturing process. Knowledge and technology transfer are crucial for survival and growth of new technology-based firms (Somsuk & Laosirihongthong, 2014), which is related to general human capital. Accelerators should organize a wide range of technology and knowledge transfers, for example by training programs, technical assistance, seminars or expert group meetings. The programs have to provide help by refining and implementation of designs, building and testing of prototypes, verifying application, conducting field studies, etc. (Somsuk & Laosirihongthong, 2014). In the early phase startup teams have a lack of knowledge, some general knowledge can then be provided by the program, which is beneficial for startup’s general human capital. During the first period of the program startups face similar problems. With the acquired knowledge on the three discussed knowledge types, startups are able to make better decisions than before the workshops and masterclasses. This leads to the following proposition:

Proposition 1: Education activities in an accelerator programs have a positive impact on startup’s human capital

Impact of technological education

Since most founders of technology companies have a technical background, either by previous work experiences, a technical degree or both, they already have a lot of knowledge about technology. Technical education is therefore less necessary in accelerator programs for technological

Proposition 1A: Education activities on technological knowledge have a positive impact on startup’s human capital

The given seminars about technology knowledge will have a stronger positive impact on the Deal-flow maker, because in that program not all the participants will have a technical background. Where at a Welfare stimulator related to technical university entrepreneurs probably already have a high level of technological knowledge. That is why my expectation is that the positive impact of

technological education is stronger for startups from a Deal-flow maker than for a Welfare stimulator. This leads to the following proposition:

Proposition 1B: Education activities on technological knowledge have stronger positive impact on a Deal-flow maker startup’s human capital compared to a Welfare stimulator

Impact of business education

The most entrepreneurs who participate in the programs do not have managerial experience, therefore they can highly benefit from the seminars provided by the accelerator. A lot of

technological startups have problems to write a viable business plan (Van Weele, 2016), this is where the education can help. Also for other participants of the program this is relevant . Team, founders and employees, is an important factor to succeed as a startup, the long development time of technological startups could have impact on the team. The program assists the teams, when there are for instance problems between founders, or with hiring employees (Van Weele, 2016). Another topic which is difficult for the startups is legal, the most entrepreneurs do not have a legal

background. During the accelerator program, received startups get help and education on how to write and review a contract and what is important regarding IP (intellectual property). Another asset is how an entrepreneur presents itself to potential investors and customers. Startups learn, with help of the program, how to pitch themselves in front of an audience. As discussed, education on business can help young firms to partly overcome their lack of business knowledge and skills on certain topics. Therefore my expectation is that management education has a positive impact on startup’s human capital. This leads to the following proposition:

Proposition 1C: Education activities on business knowledge have a positive impact on startup’s human capital.

Startups from both the Deal-flow maker and the Welfare stimulator programs will benefit from business education. Participants from the Deal-flow maker are more experienced entrepreneurs, while at the Welfare stimulator the entrepreneurs still have to learn the real basics of managing a company. The entrepreneurs who participate in a Deal-flow maker can learn some extra skills such as the basic entrepreneurial skills (Pauwels et al., 2016). The entrepreneurs of the Deal-flow maker stay ahead from the Welfare stimulators, because of the already existing knowledge and skill set. But the impact is stronger for the startups from the Welfare stimulator, because their starting point is lower, so they have to acquire more business knowledge. Therefore my expectation is that the impact of business education on startups of a Welfare stimulator is stronger, because the starting point of knowledge is lower for startups at a Welfare stimulator, so the program can make more impact. This leads to the following proposition:

Impact of market education

The most technological entrepreneurs are considered to focus too much time on the technological component of the startup, they keep developing the product and process without thinking about what the customers really needs (Bhuian, Menguc, & Bell, 2005). To them accelerator programs can add value with their industry and market education, this type of education has two parts (Van Weele, 2016). The first part is knowledge about what the customers need, startups will learn a methodology to validate the needs of the customers. The program does not provide the customer needs, but only gives the entrepreneurs tools to discover the needs. Secondly, the program provides information how the market operates. This contains information about market size, pricing and entry barriers. My expectation is that education on market knowledge has a positive impact on the startups’ human capital. Because the entrepreneurs are helped to identify what the exact needs are of the customers, which is very helpful for further development of the company. This leads to the following

proposition:

Proposition 1E: Education activities on market knowledge have a positive impact on startup’s human capital

The Deal-flow maker accepts more experienced entrepreneurs, who might been have working in the specific industry. While the entrepreneurs at a Welfare stimulator have less work experience and for that reason also less experience in the industry. The coaches of the Welfare stimulator program can make more impact during their talks and workshops to educate the startups on the industry

information and customer pain. Defining the needs of the customer is considered one of the most important problems for startups (Van Weele, 2016). So, the education on market knowledge can make more impact on startup’s human capital of Welfare stimulators compared to the Deal-flow maker, because the startups of the Welfare stimulator have less experience and knowledge of the industry, before the program. This leads to the following proposition:

Proposition 1F: Education activities on market knowledge have stronger positive impact on a Welfare stimulator startup’s human capital compared to a Deal-flow maker

Accelerator program’s education is divided in the three types of knowledges, which can influence human capital. Figure 1 provides a schematic overview of the propositions that were discussed previously .

Networking

Accelerator programs help young firms with their network.Relationships are of particular

importance to one type of vulnerable organization: the emerging or start-up organization (Cooper, Hamel, & Connaughton, 2012). Networking could have a positive impact on the survival chances and growth chances (Bruneel, et al., 2012). Zeitz (1980) argues that organizations develop relationships with other organizations when they perceive a need for what he calls ‘‘external resources.’’ Accelerator programs could help new firms overcome their resource scarcity with their network (Bruneel et al., 2012; Zhao & Aram, 1995). The external resources are not only tangible resources, but also intangible resources. Tangible resources are for instance raw materials, land, personnel, and financial assistance (Zeitz, 1980). Examples of intangible resources are for example information and organizational legitimacy (Bruneel et al., 2012; Zeitz, 1980).

Networking is considered as the most important factor in a successful accelerator program (Cohen, 2013; Chesbrough, Norhia & Sull, 2000). Startups have the possibility to access knowledge and capabilities via the network of the accelerator program, which are otherwise not available or too expensive. One of the difficulties is that entrepreneurs not always know which resources they miss (Van Weele, 2016). This is also one of the reasons why founders are not participating in networking activities, because they don’t see the added value of these activities, besides that networking is not in the comfort zone of most technological entrepreneurs (Van Weele, 2016). The shortcomings of the startup could be addressed by the accelerator program, with the education and mentorship services, which could help the startup to detect which resources are missing to further develop the company.

Network partners Description

Tax & Legal advice Includes accounting, legal, or administrative support, as well as more specialized services such as strategy consulting or patent attorneys (Bruneel et al., 2012).

Technology partners Are universities and technological companies. The technological partner can provide knowledge or products which are not available in the organization.

Startups Participants of an accelerator program are a society of startups, which share common characteristics and interest. The startups shape a social support network, which can facilitate better understanding of problems, serve as a resource and mobilize other needed resources (Cooper, Hamel & Connaughton, 2012)

Investors Parties who fund startups, two types of investors are identified: business angels and venture capitalist.

Customers Interaction with (potential) customers helps startups to identify their needs. This helps to develop a product that solves the customer’s problem. This could lead to future revenue.

Regulators (Semi-)Government organizations that provide information regarding regulations in the market, and are able to fund startups via subsidies and grants.

Table 1 - Network partners identified by Hansen, Chesbrough, Nohria, & Sull (2000)

them, or can access them for a lower price. This could be one of the services that an accelerator program distinguishes themselves from other programs. With a strong and divers network you could accelerate the development of a startup (Street & Cameron, 2007). But if the program fails into helping the startups, in which resources startups are missing, the networking activities will have less impact on the development of the venture. And could distract from the development of the company (Watson, 2007).The six relevant network partners of an accelerator program according Hansen et all. (2000) are being displayed in Table 1.

Network partners

Impact on startup’s human capital Tax & Legal

advice

Help startups with the knowledge where they have to think about when drawing or reviewing a contact. The knowledge on IP and patent is important to protect their technology, and to understand as entrepreneur why this is important. Tax advice can help entrepreneurs how they have to fill in their tax declarations

Technology partners

New firms can seldom access established networks for hiring specialized advice on highly specific topics such as technology development, the accelerator program helps with access to these partners. Technological partners can provide

technological knowledge which is not available in the organization. These are not only commercial organizations, like strategy consultants (Lee and Osteryoung, 2004) , but also research institutes, pressure groups, governmental agencies and other organizations (Groen, Wakkee, & De Weerd-Nederhof, 2008).

Startups Shared experiences in an accelerator program can enhance startups ability to navigate the pitfall of each developmental stage (Cooper, et al., 2012). Next to the business knowledge, are startups also discussing topics as technology and market knowledge. Sharing the market knowledge helps to better understand the market. Startups share their experience on technology, which is helpful for the development of the product or service.

Investors Investors can help entrepreneurs with their market and business knowledge. The market knowledge can be provided when the investor has experience in the same market as the startup. The most investors are (ex-) entrepreneurs or managers, who have experience in management.

Customers Contact with (potential) customer helps the companies to recognize the customer pain. Talking with customers gives the startups the possibility to discover the market, where they are active in. This can all led to new insights in the market, which is beneficial for the market knowledge.

Regulators Governmental organizations could help with information about regulations. This information could be used for the technology knowledge (e.g. customer electronics need a CE-certificate). Knowledge of a regulator is also helpful for the business and market knowledge of the entrepreneurs.

Table 2 - Accelerator Program network partners' impact on startup's human capital

The impact of network partners on human capital

important predictor of performance, especially acquiring new information. The accelerator program brings the startups in contact with a broad range of network partners (Table 1), who all can

contribute to startup’s human capital with their specialized knowledge. Startups have the possibility to access knowledge and capabilities via the network of the accelerator program, which are

otherwise not available or too expensive. In Table 2 is defined per network partner the impact they can make on startup’s human capital. Startups don’t have knowledge on all the relevant topics internal, the network partners can help the entrepreneurs to overcome their lack of knowledge (Bruneel et al., 2012; Zhao & Aram, 1995). The general human capital of startups motivates entrepreneurs to acquire new knowledge (Davidsson & Honig, 2003). The knowledge acquired and capabilities learned via the network of the accelerator program will have a positive impact on startup’s human capital. This leads to the following proposition:

Proposition 2: The accelerator’s network has a positive impact on startup’s human capital All the six described network partners contribute to startup’s human capital, by talking or teaching an entrepreneur new skills or knowledge. The entrepreneurs who participate in a Welfare stimulator have in general less entrepreneurial, market, managerial and work experience. The participants overcome these shortcomings by the network partners of the accelerator program. Network partners provide information that is not available in the startup team. The Deal-flow maker startups have more experience, which leads to more business and market knowledge; this is why the network partners will have less impact on Deal-flow maker startup’s human capital. Because of the lack of business and market knowledge of the Welfare stimulator startup, is the positive impact stronger. This leads to the following proposition:

Proposition 2A: The accelerator’s network of Welfare stimulator has a stronger positive impact on startup’s human capital than the Deal-flow maker

Network partners Impact on startup’s financial capital

Tax & Legal advice Free advice, or reduced fees (cost reduction), and lower tax costs

Technology partners Free advice, or reduced fees. (cost reduction)

Startups Introduction at potential investor or customer

Investors Funding as a loan (with interest) or in exchange

for equity

Customers Sales (revenue)

Regulators Subsidy or grant

Table 3 - Accelerator Program network partners' impact on startup's financial capital

The impact of network partners on financial capital

An accelerator program helps with access to relevant networks which can make impact on startup’s financial capital. The access to finance is for startups one of the most important reasons to

Accelerator programs facilitate the access to funding, via their network, they bring startups in

contact with external parties who (potentially) provide funding (Van Weele, 2016).The investments in financial capital are for example from public subsidies (Colombo & Delmastro, 2002) or via a venture capitalist (Brittain & Freeman, 1981). In this research are six network partners identified, which all can make impact on startup’s financial capital (Table 3). Next to the income of startups, startups can also benefit from cost reduction via the accelerators network. The most partners of an accelerator program offer reduced fees for participants, which could result in a cost reduction. Overall, the network of the accelerator program has impact on startups financial capital, via income (sales, funding, public funds) and cost reduction (partner’s services and tax costs).This leads to the following proposition:

Proposition 3: The accelerator’s network has a positive impact on startup’s financial capital

The influence of network partners is stronger for the startups participating in a Deal-flow maker. This program is designed to let startup growth fast in order to acquire market share. Growth capital is extremely important for these startups, for that reason the Deal-flow maker is focusing more on startup’s financial capital than the Welfare stimulator. Deal-flow makers will let the startups meet more investors to accelerate the growth of the company. For growth of the startups are investors and customers needed, Deal-flow maker’s network is focusing on these two partners. That is why the Deal-flow maker can make more impact on startup’s financial capital than the Welfare stimulator, which is more focused on the survival of the participants. This leads to the following proposition: Proposition 3A: The accelerator’s network of a Deal-flow maker has a stronger positive impact on startup’s financial capital than the Welfare stimulator

Accelerator program’s network partners are divided in the six types of partners, which can all make impact on startup’s human and financial capital. Below is an overview in Figure 2 of the propositions that are discussed above.

Mentorship

Mentorship is seen as an important service, it plays an important role in facilitating and supporting startups founders according to Cohen & Hochberg (2014), and Patton & Marlow (2011). In this paper mentorship is defined as: A mentor who works in very close contact with the startup founders during the whole program offering advice recommendations and feedback on a frequent basis, based on their previous experience (as entrepreneur). Furthermore, some accelerator programs call their guest speakers mentors, they are invited to give several presentations to the participants of the program, in our definition they are considered as part of education. This also applies to internal coaches who provide feedback to the entrepreneurs as mentors. However, in this research only external mentors will be considered as mentors.

Startups can receive advice on technological, business and market knowledge. One of the activities mentors and startups undertake is discussing the business plan (Battistella et al., 2017), the mentor can advise the entrepreneur with knowledge to identify the market and journey in to the market for a new technology-based firm. This is a process of trial and error, where the mentor can support the startup with knowledge and his or her network (Patton & Marlow, 2011). The feedback of the mentor is relevant for the startups to discover which knowledge and network partners they need to acquire during the program.

The impact of mentorship on human capital

The knowledge provided by the mentor is considered as an external knowledge resource. The intensive assistance of the mentor during the problem can help startups to overcome their lack of knowledge and/or capabilities on certain topics. The mentor is frequently an experienced

entrepreneur, which can help with his or her experience, how to deal with similar situations he/she experienced. The advice of the mentor is important for startups, because in contrast to workshops and masterclasses, the advice of the mentor is firm-specific which makes it more valuable for startups. The advice given can be on technological, market and business topics, startups can learn from meetings with their mentor. It is also used as a moment of reflection for startups, which can provide entrepreneurs new insights.

A startup or the program management often choose a mentor who has additional knowledge next to the knowledge of the startup team. The experienced entrepreneur or manager will mainly contribute to the business knowledge of the startup, the most technological startups lack this type knowledge. In some cases the mentor will also make impact on the technological or market knowledge of the startup. Because of the lack of knowledge in a startup team, my expectation is that mentorship has a strong positive impact on the startup’s human capital. Therefore, the following proposition can be formulated:

Proposition 4: Mentorship has a positive impact on startup’s human capital

Proposition 4A: Mentorship have a stronger positive impact from the Welfare stimulators startup’s human capital compared to Deal-flow maker

The impact of mentorship on financial capital

Next to sharing knowledge, a mentor could also be involved in acquiring financial capital for startups. Financial capital can be gathered via an investment or revenue. The first investment method is an investment of the mentor into the company, as business angel. Other methods of financial capital have an indirect involvement of the mentor. Examples of indirect involvement are introduction of a potential investor or customer. The mentor’s experience helps to contact relevant parties, who might be interested in the startup. The last method is help of the mentor with applying for a subsidy or grant. Applying for public subsidies or grant could be a very bureaucratic process, which might be easier to pass with the help of a mentor. Concluding, a mentor can have direct or indirect a positive impact on startup’s financial capital. Thus, with the beforementioned, the following proposition is formulated:

Proposition 5: Mentorship has a positive impact on startup’s financial capital

Figure 3 -Impact of mentorship on human and financial capital

Conceptual model

In this research the impact of the services provided by the accelerator program on a startup’s human capital is investigated. The discussed propositions help to answer the research question: ‘What is the impact of accelerator programs on startups? ‘ Below, in Figure 4,the conceptual model is displayed , which includes all the discussed propositions.

Methodology

The collection and analysis of a theory development research is divided in four sections. First, an identification of a business phenomenon, which is not addressed. But, in this case the comparison between different kinds of accelerators. After this step, the existing literature is observed, and directly after filtered. Out of this filter, a literature gap was obtained in which the managerial relevance still needs to be addressed. All the steps will be described to provide the possible to redo the research, in order to control for the research.

The process of constructing and using qualitative research exist out of 4 steps: First define the research question, second create the interview guide, third recruit participants, and fourth carrying out interviews (Casell & Symon, 2004).

Define the research question

The beforementioned steps in qualitative research is appropriate for my research question: ‘What is the impact of accelerator programs on a startup?’, because the research is a qualitative research which explores a new theoretical field in the academic literature. Multiple researchers’ opinion is that the impact of accelerator programs on startups is a gap in the literature (Hochberg, 2016; Hathaway, 2016), which this research tries to bridge. Information on the impact of accelerator programs is scarce, an explorative study is needed to further investigate the topic.

Creating the interview guide

For this research we created an interview guide (Appendix B) as a preparation for the interviews. The interview guide contains a list of topics in which the interviewer attempts to cover in the course of the interview, and ask follow-up questions to the interviewee to obtain a better understanding and more details from the participant (Casell & Symon, 2004). The topics included are the sections from the conceptual model: Education, Networking partners, Mentorship, Human Capital and Financial Capital. Three sources of topics to be included in an interview guide: the research literature, the interviewer’s personal knowledge and experience of the area, and informal preliminary work, for example discussions with people who have personal experience in research area (Casell & Symon, 2004). Table 4 gives an overview of the used literature for the questions to startups, in Table 5 an overview of the literature used for the questions for accelerator managers.

My personal experiences with accelerator programs are, an internship at a startup which was fully in the process of participation in an accelerator program. Furthermore, during my undergraduate program I followed the minor ‘Innovation & Entrepreneurship’, in my masters Small Business & Entrepreneurship the course ‘New Ventures & Entrepreneurship’. The informal preliminary work as preparation for the interviews was discussions with my supervisors of the University of Groningen and Rabobank. On top, I spoke with three other Rabobank employees who cooperate with different accelerator programs. This all helped me to make the interview guide.

Interview Type

The type of interview used in this research is the realist interviews. From the view of a realist

epistemological, interviewees provide insight into their psychological and organizational lives outside of the interview situation (Casell & Symon, 2004). This was also the case in this research, the

the middle of the program. This creates a physical and physiological distance. The findings of the interviews with entrepreneurs are compared with other sources, such as interviews with program managers and websites of the programs and startups, this process is called triangulation (Casell & Symon, 2004). In this research we make use of triangulation, to increase the validity (Mors, 2015). Furthermore, the triangulation process increases the scope and depth of the study. Because of of the use of these overlapping methods overlapping methods the credibility of the research also increases. (Mors, 2015). Qualitative research interviews are not based on a very strict formal format, in which questions exactly have to be asked (Casell & Symon, 2004). Although, the Realist interviews in this research are more structured than some other qualitative interviews, because the different participants and types of data are systemically compared with each other (Casell & Symon, 2004).

Topic: Literature:

Networking Battistella, De Toni & Passot, 2017; Bruneel, Ratinho Clarysse & Groen, 2012

Employees Wise & Valliere, 2014; Battistella, De Toni & Passot, 2017; Bruneel, Ratinho Clarysse & Groen, 2012; Croce, Martí & Murtinu, 2013

Revenue Croce, Martí & Murtinu, 2013

Funding Cohen & Hochberg, 2014; Battistella, De Toni & Passot, 2017

Mentorship (impact, frequency) Bruneel, Ratinho Clarysse & Groen, 2012 Education Accelerator Battistella, De Toni & Passot, 2017; Bruneel,

Ratinho Clarysse & Groen, 2012 ; Van Weele, 2016

Founders / Entrepreneurs (Serial entrepreneurs, education background, management know-how)

Battistella, De Toni & Passot, 2017; Bruneel, Ratinho Clarysse & Groen, 2012

Table 4 - Questions for startups based on literature

Topic: Literature:

Accelerator type Pauwels, Clarysse, Wright & Van Hove, 2016 Total firms Wise & Valliere, 2014; Hofmann &

Radojevich-Kelley, 2012

Active firms Wise & Valliere, 2014

Participants per year Hofmann & Radojevich-Kelley, 2012 Number of applicants Hofmann & Radojevich-Kelley, 2012 Graduated from program Hofmann & Radojevich-Kelley, 2012

Failure rate Hofmann & Radojevich-Kelley, 2012

Funding (amount, % in equity, % receive further funding)

Cohen & Hochberg, 2014; Battistella, De Toni & Passot, 2017

% Self Sustaining (over the next 5 years) – If data is available

Cohen & Hochberg, 2014

Percentage of graduates who successfully exited via sale or IPO

Wise & Valliere, 2014; Cohen & Hochberg, 2014

Education Bruneel, Ratinho Clarysse & Groen, 2012 Networking Battistella, De Toni & Passot, 2017; Bruneel,

Ratinho Clarysse & Groen, 2012

Table 5 - Questions for accelerator managers based on literature

Interview questions

The interview starts with questions that are easy to answer for the entrepreneurs and managers. First is asked to tell something about their company, secondly the founder’s educational and

business background. After these topics the accelerator program is discussed in-depth. The interview guide is not a static document during the whole process. Questions that are not contained in the first interview, can be asked in another interview when a topic came up during a previous interview. Or even whole topics can be added, that where originally not included (Casell & Symon, 2004). The interviews are semi-structured, this means that there is an interview guide, but the interviewer is able to vary the sequence of questions, or to ask further questions in response to the interviewees reply (Mors, 2015) . The interview guide contains open questions and questions based on a Likert scale. Open questions are an important part of the interviews, which are conducted for a qualitative research. The given answers by the interviewees provide richer information. The Likert scale is a widely used format, it is deemed to measure the intensity the respondent feels about an issue (Bryman, 2012). In our research we used the Likert scale to ask about the impact the accelerator program made. This research combines the qualitative data of the open questions, and questions with a Likert scale to validate the answers of the interviewee, how the answers can be interpreted, and how the entrepreneur experienced it. For example, when a relatively negative answer is given in the open question and is not scaled negatively in the Likert Scale.

An example of the interview guide is shown in Table 6, where first the open questions are shown and as last the question with the Likert scale. The whole interview guide is attached in the appendix (B).

Open questions:

1. Could you tell me about the education regarding business knowledge that the accelerator program provided?

a. On which business topics?

2. What did you like about this type of education provided by the program? 3. What did you dislike? Or did you miss?

Closed question / Likert Scale (1. Made no impact all – 7 Very high impact):

4. What was the impact on a scale 1 till 7 on your company of this type of education? a. And please explain the answer, why?

Table 6 – Example Interview Guide – Interview questions (Education – Business knowledge)

Recruiting the participants

Two accelerators with twenty nested startups (ten for each accelerator) were selected for this study. To classify as Welfare stimulator, the program needs to be founded by a governmental organization or non-profit organization and has as goal to stimulate the economic activity in the region (Pauwels, Clarysse, Wright, & Van Hove, 2016). This accelerator program offers workshops & masterclasses, network partners and mentoring. A Welfare stimulator does not have the goal to make profit out of the accelerator program; therefor it is a Welfare stimulator.

To classify as Deal-flow maker, the program should be founded by business angels, venture capital funds and/or corporate venture capital funds.The most promising startups are selected to generate positive financial returns.This accelerator offers next to the workshops & masterclasses, network partners and mentoring, also seed investment in exchange for equity of the startup. (Pauwels, Clarysse, Wright, & Van Hove, 2016). With an equity component the accelerator programs can make potential profit, therefor it is a Deal-flow maker.

Ten startups in both programs are interviewed to have a reliable view on both programs. A smaller sample size would have led to biases. Examples are non-representative samples, due to the small sample size will lead to unreliable data. To minimize possible sampling biases, every startup of both programs is contacted and participated one to three years ago. Each startup has a different

technology and is active in another industry; the common characteristic Between all startups is that they are tech startups. All the participants of the two accelerators are sent an e-mail to, in the email the research topic was described and mentioned that the given answers during the interview will be taken as confidential.

When there was no response within a week, the company was called as a reminder with the request for an interview. After this process at least ten startups and a manager of both programs could be interviewed. Within a week after the interview, all the interviewees received the transcribed version of the interview; they could review this document, and ask for adjustments.

Data Collection

Twenty-two semi-structured interviews are conducted to gather data. The startups were all based in the Netherlands during the accelerator program. Out of this sample ten startups participated in a ‘Welfare stimulator’ and ten other startups participated in a ‘ Deal-flow maker’. The program managers of the accelerator programs are interviewed as well. Both programs are focused on the high-tech industry, and located in the Netherlands. Table 7 describes the two cases used in this paper, in Table 8 an overview of the interviews per accelerator type.

Name Location Founding

date Origin startups: Program length Investment size Equity stake taken HighTechXL The Netherlands, Eindhoven 2013 The Netherlands + abroad 3 months €15.000 8% (2% fixed, 6% variable) YES!Delft The Netherlands, Delft 2005 (program is founded in 2015) The Netherlands 12 months (6 months education) / /

In Table 7 and 8 are the descriptions of the startups that participated in this research. Every interview is audio-taped and afterwards transcribed, to increase the controllability. The interviews took place from November 2017 until January 2018, seventeen startups and two program managers were visited at their office. The other three startups were based abroad; these interviews were conducted via Skype or via telephone. The length of the interviews was on average between 45 and 60 minutes, the shortest was 35 minutes, and the longest interview took 90 minutes.

Table 8 – Overview interviews per accelerator

Welfare stimulator

In this research, 30% of the teams are university spinoffs, these are commercialized ideas of startup teams which started from academic ideas. All the teams that participated in this research had only male founders, the average number of founders is 2.6. The most startups (70%) were active in developing hardware products. Four out of ten companies interviewed, have participated in more than one accelerator program. The ones participated in more than one, joined often the ClimateKIC program. A couple of startups even participated in a third or fourth program.

Deal-flow Maker

The startups teams that participated in the Deal-flow maker program had almost all (90%) male founders, the average number of founders is 2.3. Lower than compared to the welfare simulator program. All participated companies developed a hardware product, 90% developed the product (partly) internally, and one startup outsourced all the software and hardware development. Three out of ten startups participated as well in another accelerator program.

Method of analysis

In the analysis, the different programs will be compared compared to each other. The data is first analyzed by building cases studies, and then compared across cases to construct a conceptual framework (Eisenhardt, 1989). To start, with all the conducted interviews were transcribed with F4Transkript. After this process, the transcribed interviews were uploaded on Atlas Coding software to code all the interviews. In qualitative research, coding is the process whereby data is broken down into component parts, which are given names. (Bryman, 2012).

The coding process exist out of three phases: Open coding, axial coding and selective coding (Bryman, 2012). The first step of the coding process was open coding, where I labeled fragments of the text that are relevant for my research question. Sometimes a fragment was labeled with multiple codes. Each time after coding a few interviews, I reviewed the current codes before starting the remaining interviews. If a new label was added during this process, I had also to review the already labeled interviews to discover if the new labels were relevant for the ‘older’ interviews. The second step in the coding process is axial coding, where I merged multiple codes as some of the codes were synonyms of each other. After this step, the codes with the same themes were grouped in code families (Table 11). The last phase is selective coding, were the founded concepts are used to develop theory. The relationships are described, and the possible explanations are investigated.

Name: Type accelerator: Total interviews Startups Program Manager

HighTechXL Deal-flow maker 11 10 1

YES!Delft Welfare stimulator

Code Families HighTechXL YES!Delft Totals Behoefte startups 82 58 140 Deelname programma 37 37 74 Education – Business 27 24 51 Education – Pitch 5 2 7 Education (algemeen) 24 7 31 Education - Tech 31 12 43 Founders 44 24 68 HighTechXL specific 67 0 67 Mentor 40 39 79 Network Partners – Customers 34 25 59 Network Partners – Investors 85 60 145 Network Partners – Regulators 32 33 65 Network Partners – Startups 46 55 101 Network Partners – Tax & Legal

28 26 54

Setup Program 13 16 29

Sales – Revenue 0 2 2

Sector – Industry focus companies

2 5 7

Tech – Startups (help of others)

28 29 57

YES!Delft specific 0 51 51

Totals 695 561 1256

Table 11 - Overview of Code families

It was important to retain the independence between the cases. During this process differences and similarities occurred, these were researched after all the interviews sections were processed. When each case study was finished, a comparison between the two cases is been made (Miles &

Huberman, 1984; Eisenhardt, 1989). To further develop theoretical insights. The two cases are compared to see similarities, and to discover the unique aspects of both programs. Tables are used to make further comparison possible.

Results

Case: ‘Welfare stimulator’: YES!Delft

During the program workshops and masterclasses are provided by the program. The setup of the program changed in the recent years, in the first edition all the education was being taught in the first two weeks. The editions after the first one spread the workshops and masterclasses over six months according to the manager of YES!Delft.

The three most important kinds of knowledge according to the program manager of YES!Delft are: technological, market and team. YES!Delft chooses to have one day per week education: “When you organize multiple days a few hours of education, than the startups will quickly skip some educational sessions.” (YD Manager). The quality of the accelerator program increased in the recent years. The experience of the assistance with startups helps YES!Delft to design a better program. “I think that we can accelerate startups with our workshops and masterclasses, because the quality education will also increase over time, so we can focus on more specific topics” according to the program manager. Startups that participated in the accelerator program have the opinion that educational sessions helped to accelerate. For example the opinion of startup 9: “Probably we would have found it out ourselves without the program. I think that we could discover all the information we needed, but that would take more time, because then you have to find information yourself. That would be in some cases be too late.

Figure 5 - Impact of Yes!Delft's education on startup's human capital

P1 is supported education impacts startup’s human, the impact of the provided education of

For Technological knowledge, we found a missed opportunity for impact due to the fact that the program does not focus on technological knowledge. The accelerator made two assumptions: 90% of the founders have a technological degree, and the businesses are too diverse. However, the startups, despite understanding the difficulties, highlight that they could benefit from some training on making their knowledge more translational.

Regarding the business knowledge, it can be structured along five core dimensions: business plan, legal, team, pitch and other. Business plan was considered to be the most important part of the program, due to the fact that it allows a complex overview of the business and its investor readiness. However, we also found that the impact of this educational activity is moderated by the quality and intensity of the coach involvement.

Market knowledge can be divided in two core dimensions: direct information about the market, and method to validate assumptions about the market. The focus of the program was on the method of validation, this enables startups themselves to go out to interview potential customers, and gather relevant data about the needs of the potential customers. Education on market information was not provided, due to the fact that startups are active in different industries. The most important skill learned is how to validate.

Education Impact (1-7):

Explanation for the score: Illustrative quotes:

Technological knowledge Background: No focus on technology in the educational program. 2.21 Potential explanations:

1) Assumption that the entrepreneurs already have the technological knowledge and passion. 90% of the teams had at least one founder with a technical degree. 2) The needed knowledge is start-up specific, thus not possible to give a general technological workshop for the whole cohort.

Conclusion: missed impact.

Startup 5: ”They couldn’t help us with technological knowledge, the program was focused on

entrepreneurship. It is also difficult to focus on technology, all the technologies are very diverse.” Business knowledge Background: Business knowledge is the main focus of education provided by the program. 5.75 Business Plan

High impact. Forced to write a very time consuming business plan, entrepreneurs are stimulated to think and rethink every aspect of their business. Startups value that they have a relatively complete picture at the end of the program.

Impact of this educational activity is moderated by the involvement of coaches, who provide feedback on the business model, and try to find out how a startup can make his/her product invesTable. This part is

characterized by some startups as the most important part of the program.

Legal

Legal is mostly provided by external speakers with a possibility for an individual appointment after the lecture. The more experienced entrepreneurs and managers liked the sessions about legal issues, because they experienced a lack of knowledge on this topic, where at other topics they felt that they had already more knowledge.

Team / HR

One of the three most important

knowledges regarding the program manager is team. YES!Delft experiences it as one of the most difficult topics to assist the startups with. Founders are asked to participate in a personality test, and to frequently attend intervision sessions with other entrepreneurs. One cohort of startups even organized the intervision sessions themselves after the program, because they experienced it as very useful.

Pitch

A presentation format that is often used by startups is a pitch. Pitch training is given as preparation for meetings with investors, or other interested parties. The entrepreneurs learn the skills the skills to pitch, which contributes to the startup’s human capital. Experienced entrepreneurs found this one of the most useful workshops.

Other

Other education workshops that are highly valued are: sales, negotiations, finance, book-keeping and marketing.