Three ways Accelerator design can impact the inclusion of social Ventures

by Katharina-Sophie Winkler, Leuphana University of Lüneburg, Germany

Accelerators are cohort-based, fixed-term start-up incubators that provide fledgling enterprises not only with the funds necessary to propel their business into break even zone, but also support founders with entrepreneurial education, experienced mentors and ambitious peers to help them succeed.

The accelerator concept is somewhat new, but already wildly successful – in the 15 years since the legendary Y Combinator launched as the first of its kind, the number of accelerators has grown rapidly and welcomed approximately 6000 start-ups into the business world.

An ever-increasing number of those start-ups is not only following numbers and KPIs – they are on the quest for a social mission to benefit Planet Earth and its inhabitants. Social business venturing has seen a major boom lately and will probably make up for a rising percentage of accelerator participation every year. But do today’s accelerators provide a sufficient environment for those social ventures to rise to full potential?

three ways Accelerator design can impact the inclusion of social startups

  1. Positive: Looking out for Team Spirit and Leadership 
    In many accelerator programs, the selection process places a high emphasis on a driven founding team with a strong team spirit and passion for their business idea. These attributes are prominent in most social start-ups since it takes passion and courage to follow the altruistic wish of following a social purpose.
  2. Positive: Providing Know-How
    Social entrepreneurs can come from all kinds of backgrounds and often do not start their business for personal gain, but to contribute to solving a problem society is facing. Therefore, they can benefit greatly from qualified mentoring and education on the hard and soft skills necessary to manage a healthy balance between pursuing social welfare while maintaining business value, attracting them to participating in an accelerator program.
  3. Negative: Valuing Revenue
    Accelerators are often funded by corporations or private investors who take a share in the participating ventures in exchange for the services provided in the program. Because of this, the prospect rapid acceleration and a timely return on investment are important criteria in the selection process – which can give social start-ups that do not engage in technological innovation of some kind a disadvantage.

The inclusion of social start-ups in accelerators depends largely on the structure of the accelerator and the business model and founding team of the start-up. Find out more about accelerator design and its implications on the subsequent success of social ventures in the anthology “Organizing for Innovation: The Case of Accelerators”.

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