A Game Theoretic Approach to the Selection, Mentorship, and Investment Decisions of Start-Up Accelerators

Zarei, Hamid; Rasti−Barzoki, Morteza; Moon, Ilkyeong

doi:10.1109/tem.2020.2974532

Cited by 14 publications

(11 citation statements)

References 55 publications

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“…As Amezcua et al (2013) indicated, the main reason why accelerated startups perform better than nonaccelerated startups is likely because startup accelerators selectively work with high-quality startups who already have a good track record, not because accelerators directly improve the quality of the startups themselves. This suggests that the key value provided by startup accelerators lies in their screening services which serve as a warrant for high quality of the accelerated ventures and effectively help them secure funding from the investors, aligning with the results from Zarei et al (2020) as well as our results.…”

Section: P4supporting

confidence: 78%

Startup accelerator analysis: strategic decision on effort exertion and information disclosure regime

Charoontham

Amornpetchkul²

2022

JEEE

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Purpose This study aims to investigate a startup accelerator’s decisions toward exerting effort in an information acquisition process and selecting an information disclosure strategy. In particular, the authors are interested in examining which factors may cause the accelerator to report more or less accurate information, which will subsequently affect the investment decision and the outcome of the ventures. This study examines the impact of the equity share taken by the accelerator on the effort level being exerted in the information acquisition process, as well as the accelerator’s decision on the information disclosure regime. Design/methodology/approach The authors use mathematical models built upon well-established theoretical and practical concepts to analyze the research problems and derive the findings. Findings The authors show that when the accelerator takes a sufficiently large equity share from the entrepreneur in exchange for admitting the entrepreneur’s venture into the acceleration program, the accelerator is motivated to exert a significant level of effort to observe an accurate signal for the quality of the venture, and then disclose the information about the venture’s quality consistently with the observed signal (informative disclosure regime). On the other hand, if the accelerator takes a small equity share, it is optimal for her to exert no effort in the information acquisition process and simply adopt the basic disclosure regime, where the accelerator reports the quality of the venture based solely on the ex ante expected payoff of the venture, regardless of the observed signal. Practical implications The results indicate that an equity sharing scheme, which awards a sufficient amount of equity to the accelerator, can be an effective tool to help obtain accurate information about the quality of a startup venture and make a well-informed investment decision. Originality/value This research illustrates that the ownership stake of the accelerator can potentially indicate the accuracy of the information about the venture provided by the accelerator to outside investors. That is, when the stake held by the accelerator is large, the investors can conjecture that the information about the venture reported by the accelerator may be highly accurate and reliable. In contrast, if the accelerator holds a small stake, then it is likely that the information provided by the accelerator may not add any value to the publicly available information. These insights can guide investors (e.g. angle investors, venture capitalists, etc.) in making well-informed startup investment decisions.

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Section: P4supporting

confidence: 78%

Startup accelerator analysis: strategic decision on effort exertion and information disclosure regime

Charoontham

Amornpetchkul²

2022

JEEE

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“…The analyses reveal that, generally speaking, the screening service is the most important, while in view of limited resources it should also have the highest priority, prevailing over mentoring and investing. The authors further prove the impact of heterogenicity of the entrepreneurship ecosystems on a macro scale on their effectiveness, which is higher than in less developed regions (Zarei et al, 2020).…”

Section: Figure 13 the Most Frequently Cited Institutions In The Scop...mentioning

confidence: 67%

Start-up Accelerator: State of the Art and Future Directions

Bańka¹,

Salwin²,

Masłowski³

et al. 2022

ERSJ

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Purpose:The paper presents a review of the literature concerning start-up accelerators and a classification of related research untill August 2021. Approach/Methodology/Design: While elaborating the classification, the authors coded works according to the type of accelerator and implemented acceleration program. Furthermore, the paper identifies the countries, research bodies and authors who focus on research on the functioning of accelerators. The authors present how various accelerator forms operate and how they perform. Findings: The paper systematizes knowledge related to start-up accelerators available in the Scopus base and suggests directions for future research. Practical Implications: Recently a clear phenomenon is shown that is the development of a start-up ecosystem, in particular creation and professionalization of the new form of organisation that is a start-up accelerator. This entity acts as a bridge between start-ups and corporations and big enterprises, promoting success of both sides -conclusion of business contracts. More start-ups and corporations decide to collaborate with accelerators that, with their acceleration programs involving big companies, support them both. By monitoring the corporate-start-up collaboration, accelerators actively promote both parties, also in terms of generating necessary innovations to support, for instance, production, sales or service processes in big companies. An evergrowing number of accelerators and accelerator programs worldwide translates into more interest in research in this field. Originality/Value: Despite the increasing research trend related to start-up accelerators, no precise research classification has been available to date.

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“…The analyses showed that, in general, the screening service is the most important and, in the face of limited resources, it should also have the highest priority, preceding mentoring and investing. The impact of the heterogeneity of entrepreneurial ecosystems at the macro level on their effectiveness was also demonstrated to be higher in less-developed regions [Zarei et al, 2020].…”

Section: Systematic Literature Reviewmentioning

confidence: 96%

“…All are articles published in journals after the year 2014. Comparing Table 1, which shows the publication dynamics, with Table 8, it can be concluded that the first publications about startup accelerators have very few or no citations [Carmel and Káganer, 2014;Richter et al, 2018b;Zarei et al, 2020].…”

Section: { }mentioning

confidence: 98%

Startup Accelerators

Bańka

Salwin

Waszkiewicz

et al. 2022

International Journal of Management and Economics

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Accelerators have been becoming increasingly popular among young entrepreneurs interested in developing products, attracting investors, or establishing relations with industry represented by large companies. The focus of the studies is to conduct literature review due to the small number of scientific articles are available on this topic. The article aims to show the current state of knowledge about startup accelerators and the support they provide. It outlines what added value accelerators offer in their programs for young innovative companies. To achieve the stated aim, the authors combine a systematic literature review with a bibliometric analysis. The results of this research will be helpful in better matching the developed project with existing accelerator programs on the market. It can contribute to a better understanding of the principles governing the programs, program expectations of the accelerator and its partners with respect to the proposed solutions (corporations, business angels, and venture capital funds).

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A Game Theoretic Approach to the Selection, Mentorship, and Investment Decisions of Start-Up Accelerators

Cited by 14 publications

References 55 publications

Startup accelerator analysis: strategic decision on effort exertion and information disclosure regime

Startup accelerator analysis: strategic decision on effort exertion and information disclosure regime

Start-up Accelerator: State of the Art and Future Directions

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