The Relationship of Proximate-Peer Characteristics of Seed Accelerator Participants to Member Firm Survival Outcomes (Theoretical)

The Relationship of Proximate-Peer Characteristics of Seed Accelerator Participants to Member Firm Survival Outcomes (Theoretical)

JFL, 300

This study examined how composite gender and ethnic heterogeneity present at three levels of proximate-peer groups of accelerators—firms, cohorts, and alumni—relate to firm survival within five years after program graduation. This research addresses the problem that accelerator membership alone does not guarantee firm success by examining the factor of heterogeneity on survival using a fixed design, quantitative, correlational approach via a Cox proportional hazards model. Using archival data from Crunchbase on Y Combinator cohorts running from 2013 to 2017 augmented with demographic output from NamSor, the study investigated whether diversity at various levels of proximate-peer interactions related to the hazard of firm survival. The results indicated a significant relationship between intra-firm and alumni-level composite heterogeneity and the hazard of survival. Higher levels of gender and ethnic heterogeneity within founding teams doubled the hazard of closure within five years after accelerator demo day. Similarly, increased diversity among alumni increased the hazard of closure immediately after graduation, ultimately becoming a positive force on firm survival two-and-a-half years after demo day. These findings contribute to social capital, social network, and cognitive diversity theory, highlighting the complex impact of early-firm diversity on post-accelerator outcomes and demonstrating the importance of network ties and time-variance in capital and resource exchange. Finally, this study provides practical guidance to accelerator programs related to how programmatic interventions can better support diverse teams to promote long-term success.