Experience Stern | Faculty & Research

Overview: Startup accelerators can be a fast track to success—but in a new working paper entitled “Beyond Demo Day: Sorting and Value Added in Startup Accelerators,” NYU Stern Postdoctoral Researcher Youn Baek (PhD ’25) and Professor Deepak Hegde, Founder and Andrew Hamilton Director of Endless Frontier Labs, find that most don’t deliver on that promise. Analyzing nearly 750,000 U.S. startups across 329 accelerators, the study shows that while a small group of top accelerators significantly improves outcomes, including funding, acquisitions, revenue, and employment growth, the majority leave startups worse off than if they hadn’t joined at all.

Why Study This Now: Accelerators have exploded in popularity, perceived as a key gateway for early-stage founders. However, joining is not costless. These programs can provide mentorship, connections, and fundraising; but they can also distract founders, take equity, and push startups to focus on short-term goals that don’t always lead to long-term success. This leaves entrepreneurs facing a critical question: which accelerator, if any, is worth joining? Until now, there has been limited evidence separating hype from real impact.

What the Researchers Found: The researchers adapted a framework to estimate accelerator value added (AVA) for their analysis and determined three key findings: 

• Selection and sorting into accelerators are first-order: founder traits and early financing strongly predict participation, and entrant pools differ sharply across program types. Stronger startups tend to enter accelerators and sort into better programs.
• Accelerator quality varies dramatically: About 60–80% of programs produce worse outcomes than no accelerator at all. A small group of high-performing accelerators significantly boosts outcomes, such as funding, growth, and exits, including Endless Frontier Labs at NYU Stern, Y Combinator, Techstars, among others.
• The best accelerators have lasting impact: Programs that boost early funding also lead to better long-term outcomes like growth and acquisitions—and help weaker startups shut down faster, allowing founders to move on more quickly, freeing up time and capital for new ideas.

What Does This Change: The findings challenge a core assumption in the startup ecosystem on the benefit of accelerators, with insights for three audiences: 

For founders, the relevant question is not whether “accelerators work,” but which ones will add true value. For investors, while accelerator affiliation is informative, it must be  considered with evidence on the historical performance of the specific accelerator. And for universities and policymakers, the proliferation of accelerators does not imply that all programs are equally effective. The focus should be on creating more high-value programs. 

Key Insight: “Startup accelerators have become a prominent institution in early-stage entrepreneurial finance, yet their economic role has remained unclear because participation is highly selective and programs are heterogeneous. This paper shows that the relevant question is not whether accelerators work on average, but which accelerators, if any, improve startup outcomes.”