Reputational impact on startup accelerator’s information disclosure and performance

Charoontham, Kittiphod; Amornpetchkul, Thunyarat

doi:10.1080/10438599.2021.1910030

Cited by 6 publications

(6 citation statements)

References 33 publications

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“…Furthermore, when accelerators work with investors repeatedly over time, the accelerators have incentive to build up reputation for providing credible information about the startups graduating from their acceleration programs to keep a good relationship with the investors. If it has been determined that the information provided by the accelerators does not match with the actual performance of the startups, the accelerators may suffer from the loss of future businesses (Charoontham and Amornpetchkul, 2021). Such effects of reputation could be incorporated into the analysis of startup accelerators' behavior in terms of producing and reporting reliable information about the ventures in their programs.…”

Section: Discussionmentioning

confidence: 99%

“…Our results, on the other hand, show that it can be optimal for the accelerator to report negative information even when the observed signal is positive as long as the ex ante expected return on the venture is negative, and the accelerator's equity share is so small that she does not want to exert any effort in the information acquisition process. Another study in this area was conducted by Charoontham and Amornpetchkul (2021) to investigate the reputational impact on a startup accelerator's decisions regarding how much effort to exert in the venture assessment process and what information about the venture's quality to disclose to the public. Their results showed that when the severity of the expected reputational loss from disclosing inaccurate information about a venture is sufficiently large, the accelerator is incentivized to exert a high effort level in the venture assessment process and subsequently report the quality of the venture consistently with what she has actually observed during the acceleration program.…”

Section: Literature Reviewmentioning

confidence: 99%

“…We also investigate how such impact of the equity share is, in turn, affected by the venture's expected payoff and provide numerical results to demonstrate our key findings. These analyses and results, which are not discussed in Charoontham and Amornpetchkul (2021), are highly applicable to emerging economies, where the information about the equity share taken by each startup accelerator is much more readily available, compared to the information about the accelerators' reputation (e.g. the success rate of graduates, the number of investments, the number of exits and the total funding amount).…”

Section: Literature Reviewmentioning

confidence: 99%

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

Charoontham

Amornpetchkul²

2022

JEEE

Self Cite

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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: Discussionmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

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

Charoontham

Amornpetchkul²

2022

JEEE

Self Cite

View full text Add to dashboard Cite

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“…In the economic aspect, the authors refer to the profits generated by start-ups carrying out commercial activities under accelerator programs [41,48,55,82,92,96] and the success of companies cooperating with accelerators in a broad sense [30,36,58,59,[62][63][64]69]. Attention is paid to the effectiveness of acceleration programs implemented both from the perspective of enterprises and investors [32,33,45,51,70,71,76]. Many authors emphasise the importance of the availability and effectiveness of their use within the implemented programs and the significance of their accessibility for the development of innovation and entrepreneurship [28,42,47,49,55,57,60,70,72,73,78,80,90].…”

Section: Analysis Of Sustainability Aspects and Materials Features Ap...mentioning

confidence: 99%

Start-Up Accelerators and Their Impact on Sustainability: Literature Analysis and Case Studies from the Energy Sector

et al. 2022

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Start-up accelerators are units supporting entrepreneurs (substantively, financially, legally, and organizationally) in establishing and running young and innovative companies such as start-ups. The commencing energy crisis has led to the need for energy savings, as well as the need to change energy policies and implement energy transformation, creating a wide field for start-ups and start-up accelerators. Making full use of potentially innovative solutions developed by start-ups is, in turn, essential for energy giants and related accelerators in the market. This has created the need for specific research in this direction. Therefore, in this paper we review the literature for 2011–2021 with respect to the role of accelerators supporting start-ups. A survey based on the Scopus database resulted in the identification of 76 papers on accelerators. Particular attention was paid to aspects of sustainable development (economic, social, and environmental). The analysis indicated that 75 works dealt with the economic aspects, 35 focused on social aspects, and only 5 focused on environmental aspects. Due to the perceived gap related to the small number of works dealing with environmental aspects, a decision was made to analyse the energy sector and the methods of operation of accelerators in this sector. Three models found in the market that were used by energy companies to cooperate with start-ups were characterized, along with their goals, in an attempt to enable an improved understanding as to which acceleration model best fits a manager’s organization. The models were supported by case studies—a model of commercial cooperation between a corporation and an external accelerator, a model of creating a corporate accelerator within an internal structure, and a hybrid model.

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“…Qualitative research was used to determine the impact of a startup accelerator's reputation on its information policy in terms of notifying investors about the quality of its activities. It was observed that the motivation to evaluate ventures honestly and conscientiously and to inform investors depends on the severity of potential image and economic losses resulting therefrom [Charoontham and Amornpetchkul, 2021].…”

Section: Systematic Literature Reviewmentioning

confidence: 99%

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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Reputational impact on startup accelerator’s information disclosure and performance

Cited by 6 publications

References 33 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 Accelerators and Their Impact on Sustainability: Literature Analysis and Case Studies from the Energy Sector

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