In recent years, business accelerators have become a cornerstone of entrepreneurial ecosystems worldwide. But despite their growing popularity, a crucial question remains: what exactly makes these programs effective, and for whom?
Our new research provides the first experimental evidence distinguishing between two fundamental approaches to entrepreneurial training: developing managerial capital (focusing on operational efficiency) versus entrepreneurial capital (emphasizing opportunity exploration and network building).
The power of targeted training to unlock ventures’ growth
Working with over 300 entrepreneurs in Colombia, we randomly assigned participants to receive either managerial or entrepreneurial capital training. The results challenge the one-size-fits-all approach to entrepreneurial support:
- For the average entrepreneur, managerial capital training proved more effective, leading to 18% faster sales growth compared to those receiving entrepreneurial training
- However, for high-potential ventures, entrepreneurial capital training unlocked extraordinary performance, driving 43% faster growth and creating more full-time employment opportunities
- Entrepreneurs receiving managerial training spent 17% less time on administrative tasks, redirecting their attention to monitoring operations and implementing performance indicators. On the other hand, firms receiving entrepreneurial capital were more likely to innovate, mainly through product/service upgrading.
From research to practice
These findings have important implications for both policymakers and accelerator programs. The key takeaway? Targeting matters. While business accelerators can be powerful tools for supporting entrepreneurship, their effectiveness depends heavily on matching the right type of training to the right entrepreneur.
As early-stage ventures grow, entrepreneurs have to deal with a growing number of administrative tasks, create processes to run the operation, and keep working on expanding markets. Business accelerators provide capabilities to deal with these growing pains. For most ventures, the priority should be building strong operational foundations through managerial training. This helps entrepreneurs run their businesses more efficiently and establish robust monitoring systems. However, for ventures showing high growth potential from the start, programs should focus on entrepreneurial capital development – helping them explore new opportunities, build networks, and scale rapidly. This targeted approach will maximize the impact of the invested resources and allow entrepreneurs to gain the capabilities that are most useful for their businesses.
Future work needs to explore how to identify high-potential ventures more accurately, investigate how team creation and delegation can alleviate some of the challenges that come with growth, and examine how business accelerators can operationalize a more targeted approach.
Juanita Gonzalez-Uribe
Michael Leatherbee
