Startup Accelerators Are Working For Cities


The Metropolitan Policy Program at Brookings Institution has mapped the location and charted the continued growth of startup accelerators in metropolitan areas around the U.S. They’ve grown 50 percent a year, from 16 to 180, since Y Combinator opened the first accelerator in 2005.

Most accelerators have a set date range (typically a few months) and workspace, trade funding for equity, offer mentorship, and end with a Demo Day. It’s an intense process intended to speed the learning and funding curve for entrepreneurs.

In an examination of 5,000 startups that received funding in the last decade, the Brookings analysis found that companies involved in accelerators (and still alive) raised an average of $3.7 million. Accelerators don’t just attract money for themselves. They increase the likelihood that other startups not in an accelerator will receive funding too.

Startup accelerators can have a negative impact on a company, but studies have shown that accelerators (particularly top ones) aren’t just good for a lot of businesses. They’re good for cities and entrepreneurial ecosystems.

Brookings is working on a tool to gauge the success of innovation districts, but the best accelerators bring together opportunities and players from the elements of the entrepreneurial ecosystem where they live. That’s angel investors, business executives, and entrepreneurs who can act as mentors or early investors to tentative but promising companies.

Accelerators have universal qualities. They work best as a garden growing wild, tangled banks that create dynamic cities and creative companies capable of tackling big problems.

Startup accelerators are barely a decade old. As they mature, a particular picture emerges from research done so far: Sources of funding differs from city to city, but accelerators and ecosystems have a symbiotic relationship.

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