by Romy Linde, Leuphana University of Lüneburg, Germany
Social ventures face high failure rates and could therefore use help from supporting organizations such as accelerators. Based on her recent publication, Romy Linde explores the compatibility of accelerators and social ventures.
Natural disasters, global hunger and poverty call for fast solutions for the world’s toughest economic and social problems. More and more scholars consider that humanitarian and environmental crises cannot be solved without including economic activities. Social entrepreneurs make a decisive contribution in this respect. However, social ventures, like commercial start-ups, have high failure rates.
In light of this, I wondered if accelerators could support social ventures as they help start-ups to grow and improve their performance. Is the concept also suitable for not only profit oriented ventures that put social value creation at least on an equal footing as maximizing shareholder value?
In order to answer this question, I compared the core elements and goals of accelerator programs with the tensions and challenges faced by social entrepreneurs. In doing so the following 3 characteristics of accelerator programs were assessed as to whether they match or mismatch social entrepreneurship.
The duration of accelerator programs is usually very short with 3 months. Within this period social entrepreneurs have to work on economic and social topics as they follow a dual mission of creating economic and social value. Therefore, the short duration of the accelerator programs could be counterproductive. Unlike typical accelerators with private investors, they seek for long term growth rather than rapid growth. I concluded that they might also need a longer period of support because of their long-term orientation.
The education opportunities offered by the accelerators train social entrepreneurs in entrepreneurial topics. They refine their business models and gain knowledge which gives them credibility from investors and customers. However, this point also offers potential for improvement. Due to the dual mission, I suggest that social entrepreneurs also need educational offerings referring to social topics.
3. Networking and Mentoring
Networking and mentoring effects seems to be by far the biggest benefits for social entrepreneurs. Accelerators can add a lot of value when it comes to developing networks. It seems particularly important that social entrepreneurs get the ability to meet investors. Furthermore, social entrepreneurs can benefit from the experience of the mentors and learn a lot about stakeholder management. It would be helpful for them if mentors from the nonprofit sector were involved.
To summarize, accelerators and social entrepreneurship are compatible in some significant points. However, the points listed also offer approaches to focus the programs even more on social ventures and thus increase the probability to speed up social venture creation. Having said this I recommend diving deeper into tackling the tensions in further research to create an accelerator program that is especially suitable for social ventures.
This post draws on the author’s book chapter, Accelerators: An opportunity to speed up social venture creation?, published in Organizing for Innovation: The Case of Accelerators.